A man buys a racehorse for $20 comma 00020,000 and enters it in two races. He plans to sell the horse afterward, hoping to make a profit. If the horse wins both races, its value will jump to $70 comma 00070,000. If it wins one of the races, it will be worth $45 comma 00045,000. If it loses both races, it will be worth only $10 comma 00010,000. The man believes there is a 3030 % chance that the horse will win the first race and a 3535 % chance that it will win the second one. Assuming that the two races are independent events, find the man's expected profit.

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Business

Madelyn Stephens

23 January, 23:36

A man buys a racehorse for $20 comma 00020,000 and enters it in two races. He plans to sell the horse afterward, hoping to make a profit. If the horse wins both races, its value will jump to $70 comma 00070,000. If it wins one of the races, it will be worth $45 comma 00045,000. If it loses both races, it will be worth only $10 comma 00010,000. The man believes there is a 3030 % chance that the horse will win the first race and a 3535 % chance that it will win the second one. Assuming that the two races are independent events, find the man's expected profit.

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Titus Calhoun · Answer 1

A man buys a racehorse for $20,000 and enters it in two races. He plans to sell the horse afterward, hoping to make a profit. If the horse wins both races, its value will jump to $100,000. If it wins one of the races, it will be worth $50,000.