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You are trying to decide whether to invest some idle cash in undeveloped land or gold. You intend to hold either investment for 5 years before selling out and sailing the Caribbean. You have made the following estimates of the value of the land and gold 5 years from now:

Land

Probability Cash Flow

0.2 $60,000

0.5 $80,000

0.3 $100,000

Gold

Probability Cash Flow

0.3 $40,000

0.4 $85,000

0.3 $140,000

1) What is the expected value of each investment?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91772170

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