M=09

Participation 2 Take the last two digits of your I.D. and replacem by them in the question below and then solve it: Question: James wants to invest some money that he has won as a prize. He decided to invest in one of the following: stock market, bonds or CDs. The following table displays the possible profits that he might gain during the next year from these three alternatives: M=09 States of Nature Decision Alternatives Good Economy Poor Economy Stock market 80000+100m -20000+100m Bonds 30000+100m 20000+100m CDs 23000+100m 23000+100m Probabilities Draw the decision tree and analyze the problem by using the EMV approach. 0.6 0.4 For example, if your I.D. is SA3921, you will take the two digits 21 at the end of your I.D. and replace m by them as follows: States of Nature Decision Alternatives Good Economy Poor Economy Stock market 80000+100(21) -20000+100(21) Bonds 30000+100(21) 20000+100(21) CDs 23000+100(21) 23000+100(21) Probabilities 0.6 0.4 So, the question that you will draw the decision tree for and analyze by the EMV approach has the following payoff table: States of Nature Decision Alternatives Good Economy Poor Economy Stock market 82100 -17900 Bonds 32100 22100 CDs 25100 25100 Probabilities 0.6 0.4 Participation 2 Take the last two digits of your I.D. and replacem by them in the question below and then solve it: Question: James wants to invest some money that he has won as a prize. He decided to invest in one of the following: stock market, bonds or CDs. The following table displays the possible profits that he might gain during the next year from these three alternatives: M=09 States of Nature Decision Alternatives Good Economy Poor Economy Stock market 80000+100m -20000+100m Bonds 30000+100m 20000+100m CDs 23000+100m 23000+100m Probabilities Draw the decision tree and analyze the problem by using the EMV approach. 0.6 0.4 For example, if your I.D. is SA3921, you will take the two digits 21 at the end of your I.D. and replace m by them as follows: States of Nature Decision Alternatives Good Economy Poor Economy Stock market 80000+100(21) -20000+100(21) Bonds 30000+100(21) 20000+100(21) CDs 23000+100(21) 23000+100(21) Probabilities 0.6 0.4 So, the question that you will draw the decision tree for and analyze by the EMV approach has the following payoff table: States of Nature Decision Alternatives Good Economy Poor Economy Stock market 82100 -17900 Bonds 32100 22100 CDs 25100 25100 Probabilities 0.6 0.4