a Secure T httpe//uab instracture.comycouries 5 pts Access Question 10 Media Gal

Question

a Secure T httpe//uab instracture.comycouries 5 pts Access Question 10 Media Gallery My Media McGraw Hill There are two houses with almost identical characteristics available for investment in two different neighborhoods. The real estate markets for the two neighborhoods are very different. The anticipated eain in value when the houses are sold in 10 years has the following probability distribution: Connect Proctoru Returns 0.25 $22,500 $30,500 0.40 $10,000 $25,000 0.35 $40,500 $10,000 For instance, there is a 0.35 probability that the house in Neighborhood A can be sold for a $40,500 proft in 10 years. The probability that the house in Neighborhood B can be sold for a $25,000 proft in 10 years is 0.40. What is the expected gain for the house in Neighborhood A? Your answer should have O decimal places. That is, your answer should be a whole number. arch

Explanation / Answer

Expected gain for house in neighborhood

= ( -22500 × 0.25) + (0.40 × 10000) + (0.35×40500)

= (-5625) + (4000) + (14175)

= 12550

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.