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lI'Gl'tUESTIIZII'lI 1 Encik Yusuf is considering about investing in a Private Retirement Scheme {PR5}. After studying various forms of investment, he has decided that only three providers suit his needs. These are Public Mutual Berhad. Kenanga Investors Eierhad and AmFunds Management Bemad. The choice of PR3 providers depends on the interest rate since the return on the investment will be a function of this interest rate. Currently, the interest rate is considered quite volatile and can go up or down signicantly over the coming year. Based on the current return on investments, Encik Yusuf has developed the following table showing the payoffs of the investments after one year depending on the interest rate at the end of the year. Alternative Public Mutual Kenanga Investors AmFunds Management Eerhad PM Berhad Kl Bemad AF RM 65 UCICI RM 35 RM EU {IUD RM 1'00 000 RM 90 am RM 91 000 From his observation, the probability that the interest rate will be low is [1.55. and 0.45 that it will be high. He has a friend who claims to be able to forecast future market conditions. This service is available for a RMQ fee. The probability that the forecast is going to be favorable is Ul}. The following table shows the revised probabilities of past performance of the forecasting service. Given the survey The event that the actual interest rate is - edicted the market Low Favorable Unfavorable Note: PfLow | Favourable} = [1.3 a} Construct a complete decision tree for this problem. ('11 marks] b} Advise Encik Yusuf for the best decision. (2 marks) c} Compute the expected value of sample information. (2 marks)

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