A financial advisor offers two investment strategies: 'Growth' and 'Value'. The Growth strategy has a 60% chance of yielding a 15% return and a 40% chance of a 5% loss. The Value strategy has an 80% chance of yielding a 10% return and a 20% chance of a 2% loss. For an initial investment of $10,000, which strategy offers a higher expected return, and what is that expected return in dollars (rounded to the nearest dollar)?
✓ Correct Answer: Option C
Growth: (0.60 * 0.15) + (0.40 * -0.05) = 0.09 - 0.02 = 0.07 (7% return). Value: (0.80 * 0.10) + (0.20 * -0.02) = 0.08 - 0.004 = 0.076 (7.6% return). Expected return for Value strategy: 0.076 * $10,000 = $760.