Question: I want the solution to be absolutely correct Q 2 : A financial advisor has recommended two possible mutual funds for investment: Fund A and

I want the solution to be absolutely correct
Q2: A financial advisor has recommended two possible mutual funds for investment:
Fund A and Fund B. The return that will be achieved by each of these depends on
whether the economy is good, fair, or poor. A payoff table has been constructed to
illustrate this situation. (7 marks)
Answer the following and show detailed calculations.
(a) Draw the decision tree to represent this situation. (2 marks)
(b) Perform the necessary calculations to determine which of the two mutual funds is
better. Which one should you choose to maximize the expected value? (2 marks)
(c) Suppose there is a question about the return of Fund A in a good economy. It could
be higher or lower than $10,000. What value for this would cause a person to be
indifferent between Fund A and Fund B (i.e., the expected value would be the same)?
(3 marks)
I want the solution to be absolutely correct Q 2

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