Answer:
$11
Step-by-step explanation:
[tex]\left\begin{array}{c|ccc}&$Lose \$25&$Gain \$5&$Gain \$45\\$Stock ABC&40\%&15\%&45\%\end{array}\right[/tex]
We want to calculate the expected gain or loss of Stock ABC with the probabilities above.
Note that loss is written in negative.
[tex]E$xpected Value =$ (-25 \times 40\%)+(5 \times 15\%) + (45 \times 45\%)\\=(-25 \times 0.4)+(5 \times 0.15)+(45 \times 0.45)\\=-10+0.75+20.25\\=\$11[/tex]
Stock ABC has an expected gain of $11.
