Current Attempt in Progress

Steven M$.$ specializes in buying high$-$risk commercial paper; his required return on these investments is $15\mathrm{.}8$ percent per year. He is considering buying some $60-$day paper from Sheridan Corp. with a promised yield of $8\mathrm{.}4$ percent per year. However, Steven believes there is a $1-$percent chance that Sheridan will default on this debt, in which case he would recover only $75$ percent of the face value. How much will Steven be willing to pay for each $$1,000$ par value of this paper? $($Round answer to $2$ decimal places, e$.$g$.5,275\mathrm{.}75.)$

Expected value

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