A New Business Opportunity Has a 70% Chance of Being

question 23

Multiple Choice

A new business opportunity has a 70% chance of being worth $500,000 next year and a 30% chance of being worth $100,000. The appropriate expected rate of return is 10%.
-Refer to the information above. What is the expected value of this investment?

• A)$380,000
• B)$300,000
• C)$220,000
• D)none of the above

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Definitions:

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