You can invest in either project A or B.Project A has value $150 with probability 0.1 and value $75 with probability 0.9.Project B has value $110 with probability 0.2 and value $65 with probability 0.8.
A)You should invest in project A
B)You should invest in project B
C)You should not invest in either
D)You cannot tell from the information presented

Question

Quizplus · Accepted Answer

The expected value of Project A is $82.5, while the expected value of Project B is $74. Therefore, you should invest in Project A as it has a higher expected value.

You Can Invest in Either Project a or B