Louis has invested $1,000 in the stock market.At the end of one year,there is a 30% chance that his stock will be worth only $800 and a 70% chance that it will be worth $1,200.The expected value of his stock at the end of one year is:
A)$1,000.
B)$1,080.
C)$1,200.
D)$1,160.

Question

Quizplus · Accepted Answer

The expected value is calculated as the sum of each outcome multiplied by its probability: (0.30 * $800) + (0.70 * $1,200) = $240 + $840 = $1,080.

Louis Has Invested $1,000 in the Stock Market