Question:

An investor is considering 2 strategies for a $1,000 investment. The probable returns are estimated as follows:

Strategy 1: a profit of $10,000 with probability of 14.0909% and a loss of $1,000 with probability of 85.9091%

Strategy 2: a profits of $1,000 with probability of 50%, a profit of $500 with probability of 30% and a loss of $500 with probability of 20%

Which strategy should he adopt?

Price: $2.99

Solution: The downloadable solution consists of 1 pages
Deliverable: Word Document