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Suppose that each of two investments has a 3% chance of a loss of $10...

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Finance

Suppose that each of two investments has a 3% chance of a loss of $10 million, a 2% chance of a loss of $5 million, and a 95% chance of a loss of $1 million. They are independent of each other.

What is the expected shortfall for one of the investments when the confidence level is 95%?

Group of answer choices

$7 million

$6 million

$7.5 million

$8 million

Answer & Explanation Solved by verified expert
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