Help Please - Probability

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tony4321

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You are considering whether to buy 750 shares of a company currently priced at £4 per share. You estimate that the shares will either increase in value by 25% over the next 6 months or decrease by 40% over the same period. You intend holding the shares for 6 months and believe that the probability of a rise in share price is 0.7. Alternatively you can leave the money in the bank and earn £175 in interest over this period.
What is the expected return from the optimal policy to two decimal places?
 
tony4321 said:
You are considering whether to buy 750 shares of a company currently priced at £4 per share. You estimate that the shares will either increase in value by 25% over the next 6 months or decrease by 40% over the same period. You intend holding the shares for 6 months and believe that the probability of a rise in share price is 0.7. Alternatively you can leave the money in the bank and earn £175 in interest over this period.
What is the expected return from the optimal policy to two decimal places?
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