If the payoff of a risky investment has three possible outcomes ($1,000 ,$2,000 , $5,000) with the probabilities.60,.30,.10,. Respectively. The expected value is?

To calculate the expected value of the risky investment, we multiply each possible outcome by its corresponding probability and then sum up the results.

Expected value = ($1,000 * 0.60) + ($2,000 * 0.30) + ($5,000 * 0.10)
Expected value = $600 + $600 + $500
Expected value = $1,700

Therefore, the expected value of the risky investment is $1,700.

Expected value = (Probability of outcome 1 - Outcome 1) + (Probability of outcome 2 - Outcome 2) + (Probability of outcome 3 - Outcome 3)

= (0.6 - 1000) + (0.3 - 2000) + (0.1 - 5000)
= 600 + 600 + 500
= $1700