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5. [0/0.5 Points] DETAILS PREVIOUS ANSWERS CRAUDQL3 5.5.044. MY NOTES ASK YOUR TEACHER PRACTICE ANOTHER In finance the n
Posted: Mon Nov 15, 2021 10:42 am
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- 5 0 0 5 Points Details Previous Answers Craudql3 5 5 044 My Notes Ask Your Teacher Practice Another In Finance The N 1 (131.16 KiB) Viewed 104 times
5. [0/0.5 Points] DETAILS PREVIOUS ANSWERS CRAUDQL3 5.5.044. MY NOTES ASK YOUR TEACHER PRACTICE ANOTHER In finance the notion of expected value is used to analyze investments for which the investor has an estimate of the chances associated with various returns (and losses). For example, suppose you have the following information about one of your investments: With a probability of 0.7, the investment will return 70 cents for every dollar you invest, and with a probability of 0.3, the investment will lose 40 cents for every dollar you invest. The expected rate of return for this investment is calculated the way we calculate the expected value of a game: Multiply the probability of each outcome by the amount you earn (or by minus the amount if you lose) and add up these numbers. Calculate the expected rate of return for the investment described above. % eBook + Show My Work (Optional) Submit Answer