Answer:
Expected Values : 1st Investment = 1200000 ; 2nd Investment = 2000000 ; 3rd Investment = 7000000
Explanation:
Expected Value = Sum of [(X Value) x (X Probability)]
E[X] = Σ [X.{P(X)}]
1st Investment
X = 20% , 50% , 30% ; P(X) = +5000000 , +10000000 , - 10000000
E(X) = 0.2 (5000000) + 0.5 (1000000) + 0.3 (-1000000)
= 1000000+ 500000 - 300000 = 1200000
2nd Investment
X =15% , 35% , 50% ; P(X) = +5000000 , +4000000 , -1000000
E(X) = 0.15 (5000000) + 0.35 (5000000) + 0.5 (-1000000)
= 750000 + 1750000 - 500000 = 2000000
3rd Investment
X = 0.25 , 0.05 , 0.70 ; P(X) = 5000000 , 3000000 , -1000000
E(X) = 0.25 (5000000) + 0.05 (3000000) + 0.70 (-1000000)
= 1250000 + 150000 - 700000 = 700000
