An Investor Is Considering a $25,000 Investment in a Start-Up

Multiple Choice

An investor is considering a $25,000 investment in a start-up company. She estimates that she has probability 0.2 of a $15,000 loss, probability 0.15 of a $20,000 loss, probability 0.05 of a $40,000 Profit, and probability 0.6 of breaking even (a profit of $0) . What is the expected value of the profit?

A) $11,000
B) $1,667
C) -$4,000
D) $8,000