So malik is considering investing $900 in a certain company. financial advisors forecast that there is a 30% chance that the stock will increase in value by 150%, and a 50% chance that he will lose his initial investment. determine if malik should make the investment, and find the expected value of the investment.

B. No, the expected value is –$45

Step-by-step explanation:

Define three events  

A = stock increases in value by 150%  

B = stock loses value  

C = no change in stock value  

Probabilitlies  

P(A) = 0.30  

P(B) = 0.50  

P(C) = 0.20  

Net Value  

V(A) = 1.5*900 = 1350  

V(B) = -900  

V(C) = 0  

Expected value  

E(X) = P(A)*V(A)+P(B)*V(B)+P(C)*V(C)  

E(X) = 0.3*1350 + 0.5*(-900) + 0.2*0  

E(X) = -45  

Malik is expected to lose about 45 dollars on average  

He should not make the investment

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step-by-step explanation:

answer: b.48 for

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