# Quantitative methods

posted by Quenice

Allen must decide whether to invest \$10,000 in the stock market or in a certificate of deposit (CD) at an interest rate of 9%. If the market is good , he believes that he could get a 14% return on his money. With a fair market, he expects to get an 8% return. If the market is bad, he will most likely get no return at all-in other words, the return would be 0%,. Allen estimates hat the probability of a good market is 0.4, the probability of a fair market is 0.4, and the probability of a bad market is 0.2, and he wishes to maximaize his long-run average return. (a) Develop a decision table for this problem. (b) What is the best decision?

## Similar Questions

Envision you have served as business manager for over two years. you noticed that for the last 12 months the business has regularly had cash assets of\$20,000 or more at the end of each month.you have found a 6-month certificate of …
2. ### Math

Envision that you have served as business manager of Media World for over 2 years. You have noticed that for the last 12 months the business has regularly had cash assets of \$20,000 or more at the end of each month. You have found …
3. ### Math

Can someone steer me in the right direction?
4. ### Math

I really need some help with this one. Envision that you have served as business manager of Media World for over 2 years. You have noticed that for the last 12 months the business has regularly had cash assets of \$20,000 or more at …
5. ### Business Analysis / Investment

Help! I have had several solutions and cannot come up with an answer. Thank you! Envision that you have served as business manager of Media World for over 2 years. You have noticed that for the last 12 months the business has regularly …
6. ### MATH

Please help check my answers to make sure they are correct. I used the "sinking fund payment and present value of an ordinary annuity" formulas to solve this story problem. Thanks! Story: Naomi Dexter is 20 years old. She decides to …
7. ### Math

Please help check my answers to make sure they are correct. I used the "sinking fund payment and present value of an ordinary annuity" formulas to solve this story problem. Thanks! Story: Naomi Dexter is 20 years old. She decides to …
8. ### Math

Envision that you have served as business manager of Media World for over 2 years. You have noticed that for the last 12 months the business has regularly had cash assets of \$20,000 or more at the end of each month. You have found …
9. ### fin

1. A financial institution has the following market value balance sheet structure: (LG 19-1) Assets Liabilities and Equity . Cash \$ 1,000 Certificate of deposit \$ 10,000 Bond 10,000 Equity 1,000 Total assets \$11,000 Total liabilities …
10. ### Math

Using the formula. I =Prt ,calculate the simple interest where t=1/n and n is the number of periodd per year for compounding. You have \$20,000 and wished to invest it in one of two ways. Option A: You may invest it in a certificate …

More Similar Questions