Jasmine is considering buying a 1954 Chevy, restoring it, and selling it. She calculates a 0.2 probability that she will gain 25% from the project, a 0.3 probability that she will gain 10%, and a 0.5 probability that she will gain 5%. What is Jasmine's expected return?

Question

Quizplus · Accepted Answer

Jasmine's expected return is calculated by multiplying each gain by its probability and summing these products: (0.2 * 25%) + (0.3 * 10%) + (0.5 * 5%) = 5% + 3% + 2.5% = 10.5%.

Jasmine Is Considering Buying a 1954 Chevy, Restoring It, and Selling