Question
The following problem is adapted from David C. Skinner, Introduction to Decision Analysis (Florida: Probabilistic Publishing, 1996). Suppose you wish to invest $1000 for a
The following problem is adapted from David C. Skinner, Introduction to Decision Analysis (Florida: Probabilistic Publishing, 1996). Suppose you wish to invest $1000 for a year. You have three choices: a mutual fund, a management company, or a CD. Each of the investments may have a high or a low yield. Mutual funds return 68%, management companies 58%, and CDs 14%.
(a) Make a tree diagram showing all possibilities. Write the amount of money expected from the investment at the end of each branch.
| mutual fund, high yield | $ |
| mutual fund, low yield | $ |
| management company, high yield | $ |
| management company, low yield | $ |
| CD, high yield | $ |
| CD, low yield | $ |
(b) Based on your tree diagram, what is the highest value for the investment? $ (c) Based on your tree diagram, what is the lowest value for the investment?
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Audit Function Strategy Driving Audit Value The Best Practice Strategy Guide For Maximising The Audit Added Value At The Internal Audit Function Level Volume 1
Authors: Hans Beumer
1st Edition
3906861139, 978-3906861135
