Answer: D. $3,450 Given: 2,500 shares of a stock bought for $8 a share <span>Probabilities: the stock will rise to a value of $32 a share is 22%</span> <span> the stock will fall to $3 a share is 78%</span> <span>Question: What is the expected value of the investor’s profit from buying the stock?</span> Solution: (22%(32-8)-78%(8-3))2500 (.22(24)-.78(5))2500 (5.28-3.9)2500 (1.38)2500 3450
