Business Studies, asked by sowparnikasowmya, 2 months ago

The investment staff of ABC Bank is considering four investment proposals for a client: Shares, Bonds, Real estate and Savings certificate. These investments will be held for one year. The past data regarding Shares: the four proposals are given below: There is 25% chance that shares will decline by 10%, a 30% chance that they 45\% chance that they will increase in value by 15%. Also the shares will remain stable and s under consideration do not pay any dividends. 2 Bonds: These bonds stand a 40% chance of increase in value by 5% and 60% chance of remaining stable and they will yield 12%. Real Estate: This proposal has a 20% chance of increasing 30% in value, a 20% chance of increasing 20% in value, a 40% chance of increasing 10% in value, a 10% chance of remaining stable and a 5% chance of losing 5% of its value. Savings Certificate: These certificates yield 8.5% with certainty. Use Decision tree to structure the alternatives available to the investment staff and using the expected value criterion, choose the alternative with the highest expected value.​

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Answered by lokesh1987
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Answer:

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