Given information
A venture capitalist, willing to invest $, has three investments to choose from. The first investment, a software company, has a % chance of returning $ profit, a % chance of returning $1,000,000 profit, and a % chance of losing the million dollars. The second company, a hardware company, has a 20% chance of returning $ profit, a % chance of returning $ profit, and a % chance of losing the million dollars. The third company, a biotech firm, has a 10% chance of returning $ profit, a % of no profit or loss, and a % chance of losing the million dollars.
Step-by-step explanation
Formula Used:
Since, expected value for software company would be:
Software company
Expected value for hardware company would be:
Hardware company
Expected value for Biotech firm would be:
Biotech firm