Attempting to assess the probability of a recession ending

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A manager is attempting to assess the probability of a recession ending in the next six months and its impact on expected profitability. The manager believes there is a 33 percent chance the recession will end in six months and profits will return to $100 million. However, there is a 67 percent chance the recession will not end in six months, resulting in a $7 million loss. The expected profits over the next six months are:

$28.31 million.

$33 million.

$64.69 million

−$2.31 million.

Reference no: EM131387950

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