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As an investor you are trying to decide between investing in an Apartment or investing in a Warehouse. You also have the option of not
As an investor you are trying to decide between investing in an Apartment or investing in a Warehouse. You also have the option of not investing at all. You have data indicating that the probability of a Favorable Market is 0.65 and an Unfavorable Market is 0.35. The potential payouts are shown in the decision tree below. Based on the payouts and likelihood of a Favorable and Unfavorable Markets, select which option presents the best investment decision. 0.65 Favorable Market Invest in Apartment $ 330,000 0.35 Unfavorable Market $ 150,000 0.65 Favorable Market DECISION Invest in Warehouse $ 270,000 0.35 Unfavorable Market $ 275,000 Don't Invest 0 O a. Invest in Apartments -Invest in a Warehouse OC. Do not invest in any option d. Both the Apartment and Warehouse have equal payouts and both good investments
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