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Mr. Hamududu, one of the most prominent Investors in Lusaka, is considering investing in two projects...

Mr. Hamududu, one of the most prominent Investors in Lusaka, is considering investing in two projects each with a 50 percent probability of success. The expected amounts of initial investments are K645, 000 and K1, 500,000 respectively. Calculate the probability weighted average investment for the two projects.                                                                                                      

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Answer #1

The probability weighted average investment for the two projects is calculated by multiplying the probability with the corresponding expected amount of initial investments.

Probability weighted average investment = 0.50 K645,000 + 0.50 K1,500,000

Probability weighted average investment = K1,072,500

                                 

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