Probabilities

posted by .

An investor has $20,000 to invest in stocks. She can buy blue chip or specu-
lative stocks. If the market goes up the blue chips will pay o® $30,000 and speculative will
pay o® $50,000. If the market goes down, the blue chips will pay o® $10,000 and speculative
will pay o® $1,000. If the probability of the market going up is :4, then the expected pro¯t
for the best strategy is closest to?

Respond to this Question

First Name
School Subject
Your Answer

Similar Questions

  1. Math For Business

    A man has decided to invest at most $90,000 in securities in the form of corporate stocks. He has three options: blue chip stocks he assumes will yield a 6% return, growth stocks @ 12%, and speculative stocks @ 20%. No more than 25% …
  2. Personal Business Concepts

    Bernie and Pam brittten are a young couple beginning careers and establishing a household. They will each make about $50,000 next year and will have accumulated $40,000 to invest, they now rent an apartment but are considering purchasing …
  3. accounting

    Mr. and Mrs. Garcia have a total of $ 100,000 to be invested in stocks, bonds, and a money market account.The stocks have a rate of return of 12%/ year, while the bonds and the money market account pay 8% and 4%/ year, respec-tively. …
  4. Math - Expected Value

    If you select a chip at random from a jar with 7 red, 2 green and 1 blue chip. If the chip you pick is red, you win $10,000, if it is green, you wil $20,000 and if it is blue, you lost $100,000. What is your expected value of this …
  5. Algebra 1

    A person invested $20,000 in stocks and bonds. Her investment in bonds is $4,000 more than one third her investment in stocks. How much did she invest in stocks?
  6. Math

    formulate but do not solve the linear programming problem. Tracy has at most $200,000 to invest in stocks,bonds, and money-market funds. She expects anual yields of 15%, 10%, and 8%, respectively, on these investments. If Tracy wants …
  7. probability

    A stock market analyst figures the probabilities that two related stocks, A and B, will go up in price. She finds the probability that A will go up to be 0.6 and the probability that both stocks will go up to be 0.4 What should be …
  8. algebra

    A person invested 20,000$ in stocks and bonds. Her investment in bonds is 5,000$ more than half her investment in stocks. How much did she invest in stocks?
  9. Algebra

    A stock broker has $200,000 to invest in stocks and bonds. She wants to invest at least $100,000 in stocks and at least $50,000 in bonds. If stocks have an annual yield of 9% and bonds have an annual yield of 7% how much should she …
  10. MATH for Business

    Linear Programming-Investment Strategy Invest at most $90,000 in securities in the form of corporate stocks. Options into three groups of stocks: blue-chip stocks will yield 3% return (dividends and capital appreciation) within a year, …

More Similar Questions