An investment counselor calls with a hot stock tip He believes that if the economy remains strong, the investment will result in a prot of $50,000 If the economy grows at a moderate pace, the investment will result in a prot of $10,000 However, if the economy goes into recession, the investment wil...

Let X the profit from the investment ...

An investment counselor calls with a hot stock tip. He believes that if the economy remains strong,

Question:

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.