PSAT Math Multiple-Choice Question 262: Answer and Explanation

Question: 262

Which option results in the greatest gain on an investment?

• A. 60% of gaining $5,000 and 40% of gaining $0
• B. 70% of gaining $4,500 and 30% of gaining $0
• C. 80% of gaining $4,000 and 20% of gaining $0
• D. 90% of gaining $3,500 and 10% of gaining $0

Correct Answer: C

Explanation:

The correct solution is 80% of gaining $4,000 and 20% of gaining $0. The expected value is 0.80(40) = $3,200. See Lesson: Statistics & Probability: The Rules of Probability.