An Investor Is Considering a $20,000 Investment in a Start-Up

question 22

Multiple Choice

An investor is considering a $20,000 investment in a start-up company. She estimates that she has probability 0.1 of a $15,000 loss, probability 0.05 of a $20,000 profit, probability 0.25 of a $35,000 profit, and probability 0.6 of breaking even (a profit of $0) . What is the expected value of the profit?

• A)$11,250
• B)$13,333
• C)$8250
• D)$20,250

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Definitions:

Access Data Types

Specific kinds of data that can be stored in a Microsoft Access database, such as text, numbers, or dates.

Number

A mathematical object used to count, measure, and label; represented in mathematics by symbols.

Date/Time

A data type in programming, databases, and spreadsheets used to represent dates and times.

Currency

A field type in databases designed to store monetary values, ensuring accuracy and precision for financial calculations.