An investor is considering an investment in a start-up company. She estimates th

Question

An investor is considering an investment in a start-up company. She estimates that she has probability 0.25 of a $ 36, 079 loss, probability 0.20 of a $ 19, 126 profit, probability 0.15 of a $ 46, 092 profit, and probability 0.40 of breaking even (a profit of $0). What is the expected value of the profit? Write only a number as your answer. Round to the nearest whole number. For a certain type of cellphone, 35.57% of them will require a new battery after a year of usage. A sample of 18 of these type of cellphones is studied. What is the probability that exactly 8 of them will require a new battery after a year of usage? Write only a number as your answer. Round to 4 decimal places (for example 0.2416). Do not write as a percentage.

Explanation / Answer

The expected value is given by the following:
= .25(-36079) +.20(19126) +.15(46092) +.40(0)
= $1719.25

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