Type the correct answer in each box. Use numerals instead of words. An investment worth $50,000 has these expectations of returns:

30% chance of ending up worth $40,000
50% chance of ending up worth $50,100
20% chance of ending up worth $65,000
Determine the expected value and risk.

The expected value of the investment is $
. The investment is risky because it has only a
% chance of making a significant return.

The investment is risky because it has only a

2% chance of making a significant

The expected value of the investment is $ 49,050

return

Explanation:

Investment = $50,000

Expected worth = ( Chance in % x Expected Worth )

30% x $40,000           = $12,000

50% x $50,100            = $25,050

20% x $60,000           = $12,000

Total Expected Worth = $49,050

Expected value is $49,050

Chance to make the same worth is 2% ( (50000-49050 ) / 50,000 )

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