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The document contains a decision table analyzing the expected monetary value (EMV) of different investment options - stocks, bonds, and CDs - under different economic conditions. It calculates the maximum and minimum possible outcomes, the expected value under certainty, the best expected value, and the expected value of perfect information for each option. It also includes a regret analysis showing the expected and maximum regret for each investment based on the economic conditions.

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Zakiah Abu Kasim
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32 views1 page

Solution

The document contains a decision table analyzing the expected monetary value (EMV) of different investment options - stocks, bonds, and CDs - under different economic conditions. It calculates the maximum and minimum possible outcomes, the expected value under certainty, the best expected value, and the expected value of perfect information for each option. It also includes a regret analysis showing the expected and maximum regret for each investment based on the economic conditions.

Uploaded by

Zakiah Abu Kasim
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as XLSX, PDF, TXT or read online on Scribd
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Decision Tables
Data Results
Profit Good Economy Poor Economy EMV Minimum Maximum
Probability 0.5 0.5
Stock market 80000 -20000 30000 -20000 80000
Bonds 30000 20000 25000 20000 30000
CDs 23000 23000 23000 23000 23000
Maximum 30000 23000 80000
Expected Value of Perfect Information
Column best 80000 23000 51500 <-Expected value under certainty
30000 <-Best expected value
21500 <-Expected value of perfect information
Regret
Good Economy Poor Economy Expected Maximum
Probability 0.5 0.5
Stock market 0 43000 21500 43000
Bonds 50000 3000 26500 50000
CDs 57000 0 28500 57000
Minimum 21500 43000

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