Expected value of the profit


An investor is considering purchasing a small business. He knows that in case of a good market the business will yield $95,000 of profit; in case of a poor market there will be a loss of $15,000. It is known that the probability of a good market for the next year is 0.4, and the probability of a poor market is 0.6.

Find the expected value of the profit?

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Basic Statistics: Expected value of the profit
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