Find the mans expected profit

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Reference no: EM131417900

Racehorse

A man buys a racehorse for $20,000 and enters it in two races. He plans to sell the horse afterward, hoping to make a profit. If the horse wins both races, its value will jump to $100,000. If it wins one of the races, it will be worth $50,000.

If it loses both races, it will be worth only $10,000. The man believes there'[s a 20% chance that the horse will win the first race and a 30% chance it will win the second one. Assuming that the two races are independent events, find the mans expected profit.

Reference no: EM131417900

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