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An investor has a 25% chance of making $1000 if the stock market is good, and a 50% chance of making $600 if the market is average. The investor expects to lose $800 if the market is bad. The expected monetary value is:

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Answer:  $350

Explanation:

The expected monetary value is the weighted average of the outcomes.

25% - Stock Market is good

50% - Stock Market is average

25% - Stock market is bad

Expected Monetary Value = ( 0.25 * 1,000) + (0.5* 600) + ( 0.25 * -800)

= 250 + 300 - 200

= $350

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