An Investor Is Considering a $15,000 Investment in a Start-Up

Multiple Choice

An investor is considering a $15,000 investment in a start-up company. She estimates that she has probability 0.15 of a $5000 loss, probability 0.15 of a $10,000 loss, probability 0.15 of a $30,000 profit, and probability 0.55 of breaking even (a profit of $0) . What is the expected value of the profit?

A) $10,500
B) $6750
C) $5000
D) $2250