What is the expected payoff from an investment that is equally likely to move from $100 to $180 or $100 to $70?
A)40
B)15
C)-15
D)25

Name: What is the expected payoff from an investment that is equally likely to move from $100 to $180 or $100 to $70? A)40 B)15 C)-15 D)25
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Quizplus · Accepted Answer

The expected payoff is calculated as the average of the possible outcomes. Here, the investment can either gain $80 ($180 - $100) or lose $30 ($100 - $70). The average of these two outcomes is $25, calculated as ($80 - $30) / 2 = $25.

What Is the Expected Payoff from an Investment That Is