Homework Answers
| Answer |
| Payoff |
| Stock market =0.5*80000-0.5*20000=30000 |
| 40000-10000 |
| 30000 |
| Bonds=0.5*30000+0.5*20000=25000 |
| 15000+10000 |
| 25000 |
| CDs=0.5*23000+0.5*23000=23000 |
| 11500+11500 |
| 23000 |
|
Decision-Since the expected profits are higher in the stock market, investment should be made in the stock market. |
| Please like ( positive rating ) |
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possible decision alternatives and various levels of demand at
Amber Gardner's software firm:
Demand Level
0.3
0.7
Low
High
Alternative
A
$10,000
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B
$5,000
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C
($2,000)
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below)
Alternative
Demand Level
0
1
A
$ 10,000.00
$ 30,000.00
B
$ 5,000.00
$ 40,000.00
C
$ (2,000.00)
$ 50,000.00
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