3. A real estate company is considering the investment on two types of and two-bedroom apartments. The expected profits for the two types at different scenarios and the corresponding probabilities are shown in Table 3. Before starting to profit, the company should first invest on the two types of apartments for 20 billion RMB on A1 and 15 billion RMB on A2 respectively. Please decide by calculation which type of apartments is worth investing for this company? apartments: condo apartments Table 3 Expected profits by different scenarios (The profits are in billion RMB Yuan) Good Normal Bad Expected Sale Forecast 0.5 0.3 0.2 Types/Probabilities 50 25 15 Condo (A,) 80 0. -25 Two-bedroom (A2)
3. A real estate company is considering the investment on two types of and two-bedroom apartments. The expected profits for the two types at different scenarios and the corresponding probabilities are shown in Table 3. Before starting to profit, the company should first invest on the two types of apartments for 20 billion RMB on A1 and 15 billion RMB on A2 respectively. Please decide by calculation which type of apartments is worth investing for this company? apartments: condo apartments Table 3 Expected profits by different scenarios (The profits are in billion RMB Yuan) Good Normal Bad Expected Sale Forecast 0.5 0.3 0.2 Types/Probabilities 50 25 15 Condo (A,) 80 0. -25 Two-bedroom (A2)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:3. A real estate company is considering the investment on two types of apartments: condo apartments
and two-bedroom apartments. The expected profits for the two types at different scenarios and the
corresponding probabilities are shown in Table 3. Before starting to profit, the company should first
invest on the two types of apartments for 20 billion RMB on A1 and 15 billion RMB on A2
respectively. Please decide by calculation which type of apartments is worth investing for this
company?
Table 3 Expected profits by different scenarios (The profits are in billion RMB Yuan)
Expected Sale Forecast
Good
Normal
Bad
Types/Probabilities
0.5
0.3
0.2
Condo (A,)
50
25
15
Two-bedroom (Az)
80
0.
-25
3/3
1L
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