Exercise 3 The investment staff of First Union National Bank is considering four investment alternatives for a client : stocks, bonds, real estate, and saving certificates. These investments will be held for 1 year. Historical stock patterns indicate that there is a 30 percent chance stocks will decline by 10 percent, a 20 percent chance they will remain stable, and a 50 percent chance they will increase in value by 15 percent. The stocks under consideration do not pay dividends. The bonds stand a 30 percent chance of increasing in value by 5 percent and a 70 percent chance of remaining stable, and they yield 10 percent. The real estate parcel being considered has a 10 percent chance of increasing 15 percent in value, a 20 percent chance of increasing 10 percent in value, a 30 percent chance of increasing 5 percent in value, a 20 percent chance of remaining stable, and a 20 percent chance of losing 5 percent of its value. The saving certificates yield 8.5 percent with certainty. Use a decision tree to structure the alternatives available to the investment staff, and using the expected value criterion, choose the alternative with the highest expected value