Investment Risk Reward

[Carmackjw]

Out of 200 days, an investment has a chance to gain exactly 1% 180 days of the 200 days possible; the same investment has a chance of losing 3% the remaining 20 times. What is the risk/reward ratio for the investment? Please show calculation

 

[Deleted member 4993]

Out of 200 days, an investment has a chance to gain exactly 1% 180 days of the 200 days possible; the same investment has a chance of losing 3% the remaining 20 times. What is the risk/reward ratio for the investment? Please show calculation

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[Carmackjw]

Risk 20 *3% loss = 60% loss out of 200 trades
Reward 180*1% = 180% gains out of 200 trades

3:1

is this correct?

 

[Carmackjw]

Or maybe this calculation:
((20/200) x -.03) / ((180/200) x .01)

???

 

[Cubist]

Risk 20 *3% loss = 60% loss out of 200 trades
Reward 180*1% = 180% gains out of 200 trades

3:1

is this correct?

I don't think this is correct.

You probably need to use the compound interest formula to calculate to maximum possible gain (and similarly for the amount at risk)