Question
Felix Karache has always been proud of his personal investment strategies and has done very well over the last several years. He invests primarily in
Felix Karache has always been proud of his personal investment strategies and has done very well over the last several years. He invests primarily in the stock market. Over the last several months, however, Felix has become very concerned shout the stock market as a good investment. In some cases, it would have been better for Felis to have his money in a bank than in stock market. During the next six months, Felix must decide whether to invest $10,000 in the stock market or in
* six-month certificate of deposit (CID) at an interest rate of 9%%. If the market is good. Felix believes that he could get a 14% return on his money. With a fair market, he expect to get an 8% return. If the market is bad, he will most likely get no return at all in other words, the return would be 0%%. Felix estimates that the probability of a good market is 0.4, the probability of a fair market is 0.4, and the probability of a had market is 0.2.
What type of decision is Felix facing?
Develop a decision table for this decision & what is the best decision.
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