Suppose That There Is a 25% Chance That an Investment

question 19

Multiple Choice

Suppose that there is a 25% chance that an investment of $1,000 will rise in value to $1,400,and a 75% chance that the investment will fall in value to $900.What is the expected return on the investment?

• A) -$125
• B) -$25
• C) $25
• D) $100

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