How many shares of each company should she buy to maximize her expected return?

Question

Joan intends to buy a total of 5 shares from 2 companies, A and B, with at least 1 share from each company. The return on company A is either $210 or a loss of $120 with probablities 1-(1/L) and 1/L respectively, where L is the number of shares she buys from company A. The return on company B is either $205 or a loss of $95 with probablities 1-(1/4M) and 1/4M respectively, where M is the number of shares she buys from company B.

Answer 1

Maybe you should ask some people who are proficient in economics or statistics. We be zoologists.