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Business, 17.06.2020 16:57 giovney

A risk neutral investor in an uncertain environment is facing the following payoffs and probabilities for an investment project: Event Pr(event) Payoff Stronger dollar 0.25 $100,000 Weaker dollar 0.50 $20,000 No change in the value of the dollar 0.25 $80,000 Market interest rates are currently 5% and the payoff will be received in exactly 2 years. The amount invested is $25,000. What is the expected value of this project? $ nothing (round your answer to the nearest dollar).

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