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An investment counselor calls with a hot stock tip He

An investment counselor calls with a hot stock tip. He believes that if the economy remains strong, the investment will result in a proﬁt of $50,000. If the economy grows at a moderate pace, the investment will result in a proﬁt of $10,000. However, if the economy goes into recession, the investment will result in a loss of $50,000. You contact an economist who believes there is a 20% probability the economy will remain strong, a 70% probability the economy will grow at a moderate pace, and a 10% probability the economy will slip into recession. What is the expected proﬁt from this investment?

Compute and interpret the expected proﬁt for reselling the property.

Compute and interpret the expected proﬁt for reselling the property.

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