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
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