General Discussion

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problem in risk management knowledge area

Question is:

A contractor estmates that a project has a 0.5 probability of $200,000 profit, 0.3 probability of $50,000 loss and 0.2 probability of break even. The risk score of this project is ..... 

Answer is given as $85000

I would like to know whether "0.2 probability of break even" has any significance here or not, as $85K will be the answer if it is not considered

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