Reference no: EM132849248

An investment counselor calls with a hot stock tip. He believes that if the economy remains strong, the investment will result in a profit of $50000. If the economy grows at a moderate pace, the investment will result in a profit of $10000. However, if the economy goes to recession, the investment will result in a loss of $50000. You contact an economist who believes there is a 20% probability the economy will remain strong, a 70% probability the economy will grow at a moderate pace, and a 10% probability the economy will slip into recession. What is the expected profit from the investment?