Reference no: EM133092816

Question - An investment counselor calls you with a hot stock tip. She believes that if the economy remains strong, the investment in the stock will result in a profit of $20,000. If the economy grows at a moderate pace, the investment will result in a profit of $15,000. However, if the economy goes into recession, the investment will result in a loss of $10,000. You contact an economist who believes there is a 30% possibility the economy will remain strong, a 50% possibility the economy will grow at a moderate pace, and a 20% possibility the economy will slip into recession. What is the expected profit from this investment?