SOLUTION: an investor plans to put rm50000 in one of four investments. the return on each investment depends on whether next year's economy is strong or weak. table 3 summarizes the payoffs(

Question 869776: an investor plans to put rm50000 in one of four investments. the return on each investment depends on whether next year's economy is strong or weak. table 3 summarizes the payoffs(in rm) for the four investment.
investment strong weak
certificate of deposit 6000 6000
office complex 15000 5000
land speculation 33000 -17000
technical school 5500 10000
let v, w, x, and y denote the payoffs for the certificate of deposit, office complex, land speculation, and technical school, respectively. then v,w,x,and y are random variables. assume that next year's economy has 40% a chance of being strong a 60% chance of being weak. which investment would you suggest for the investor? justify your answer?

Answer by ewatrrr(24785) (Show Source): You can put this solution on YOUR website!



Hi

investment                  strong         weak

certificate of deposit      6000           6000

office complex              15000          5000

land speculation            33000         -17000

technical school            5500            

let v, w, x, and y denote the payoffs for the certificate of deposit, office complex, 

land speculation, and technical school, respectively. then v,w,x,and y are random variables. 

assume that next year's economy has 40% a chance of being strong, a 60% chance of being weak. 

which investment would you suggest for the investor? 

technical school has a record of a great return in weak economy

 

RELATED QUESTIONS

An investor had a total of 25,000 put into a portfolio of stocks, bonds, and mutual... (answered by mananth)
You have $70,000 to invest. Part in a mutual runs paying 8% per year, the rest in an EFT... (answered by richwmiller)
One safe investment pays 6% per year, and a more risky investment pays 12% per... (answered by math_tutor2020)
An investor wishes to realize a return of 12 percent on a total of 2... (answered by richwmiller)
One safe investment pays 7% per year, and a more risky investment pays 14% per... (answered by Theo,MathLover1,greenestamps)
An investment banker received a bonus and invested that money in two investments. He put... (answered by solver91311)
you have 70,000 to invest. part in a mutual fund paying 8% per year, the rest in an etf... (answered by richwmiller)
An investor plans to invest part of 5,000$ in a stock that pays 8% interest annually. The  (answered by checkley71,stanbon)
Consider an investor with a portfolio totaling $500000 that is invested in certificates... (answered by addingup,MathTherapy)