Question

III.8. Profit from a risky investment. Rotter Partners is planning a major investment. The amount of profit X is uncertain, but a probabilistic estimate gives the following distribution (in millions of dollars):

Profit: −1 0 1 2
Probability: 0.1 0.1 0.2 0.2
Profit: 3 5 20
Probability: 0.2 0.1 0.1

What is the expected value of the profit?