Exhibit 14.3 The Following Questions Are Based on the Information Below

question 104

Multiple Choice

Exhibit 14.3
The following questions are based on the information below.
An investor is considering 4 investments,A,B,C and leaving his money in the bank.The payoff from each investment is a function of the economic climate over the next 2 years.The economy can expand or decline.The following payoff matrix has been developed for the decision problem.The investor has estimated the probability of a declining economy at 70% and an expanding economy at 30%.

-Refer to Exhibit 14.3.What is the expected monetary value of Investment A?

• A)34.
• B)30.
• C)20.
• D)15.

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