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You invest in a project that has the following payoff schedule:?


Payoff Prob. of Occurence
$40 .15
$50 .20
$60 .30
$70 .30
$80 .05
What is the expected value of the investments payoff

Multiply 40 by 0.15, 50 by 0.20 etc. Record the answer for each. Add up your answers. That is your expected payoff.

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