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Problem 3. Consider the tree below. How many possible strategies are there? Up (0.5) 1,500 Flat (0.3) 100 High-Risk Stock (EMV = 580) Down (0.2)
Problem 3. Consider the tree below. How many possible strategies are there? Up (0.5) 1,500 Flat (0.3) 100 High-Risk Stock (EMV = 580) Down (0.2) - 1,000 Up (0.5) 1,000 Flat (0.3) 200 Low-Risk Stock (EMV = 540) Down (0.2) - 100 Savings Account 500 1,500 Consult Clairvoyant (EMV = 1,000) High-Risk Stock Low-Risk Stock HI Savings Account 1.000 Market Up (0.5) 500 High-Risk Stock 100 Low-Risk Stock Market Flat (0.3) 200 Savings Account 500 Market Down (0.2) High-Risk Stock - 1,000 Low-Risk Stock IK - 100 Savings Account 500
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