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Compute the expected value of the decision

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Chandy, Inc. is a global leader in mobile connectivity. Its current products provide users the ability to connect their tablets to their corporate network. Recently, the company has considered a merger with its competitor, Chantel, Inc. You are considering investing in Chandy, Inc.'s stock where you know that 1) if the merger occurs, the stock price will increase by $10 per share (probability of occurrence = 0.70), and 2) if the merger does not occur, the stock price will decrease by $5 per share (probability of occurrence = 0.30). Based on the background materials, compute the expected value of the decision and interpret what it means. Should you invest or not?

Reference no: EM133197474

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