Question 6, 14.CE. 16
Points: 0 of 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 $60,000. If it wins one of the races, it will be worth $40,000. If it loses both races, it will be worth only $10,000. The man believes there is a 25% chance that the horse will win the first race and a 30% chance that it will win the second one. Assuming that the two races are independent events, find the man's expected profit.