Estimate the expected value of p

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Question - A U.S. firm holds an asset in France and faces the following scenario:

 

State 1

State 2

State 3

State 4

Probability

25%

25%

25%

25%

Spot rate

$1.3/€

$1.22/€

$1.2/€

$1.14/€

P *

€1600

€1400

€1300

€1000

In the above table, P * is the euro price of the asset held by the U.S. firm and P, the dollar value of the asset is not shown.

Estimate the expected value of P (USD as XXXX.XX).

Reference no: EM133063076

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