You are in business and you are given two opportunities. The first you will have to invest $5,000 but you could earn $25,000 less your initial investment. The second you only have to invest $2000 but then you will earn $10,000 less your investment. The probability of getting the $25,000 opportunity is 3/10 while the probability of getting the $10000 opportunity is 2/5. Which should you choose based on expected values?
1 answer
2/5
1 answer