Liqin fixes up old cars and sells them to supplement his retirement income. Liqin came across a beat-up 1955 Corvette that she is considering rebuilding and selling. She estimates a 0.2 probability that she will gain 15% on the deal, a 0.2 probability that she will gain 10%, and a 0.6 probability that she will gain 5%. Liqin's expected return for fixing up and selling the Corvette is ____%.

Question

Quizplus · Accepted Answer

The expected return is calculated by multiplying each outcome by its probability and then summing these products: (0.2 * 15) + (0.2 * 10) + (0.6 * 5) = 3 + 2 + 3 = 8%.

Liqin Fixes Up Old Cars and Sells Them to Supplement