Allen Young has always been proud of his personal investment strategies and has done very well over the past several years. He invests primarily in the stock market. Over the past several months, however, Allen has become concerned about the stock market as a good investment. In some cases, it would have been better for Allen to have his money in a bank than in the market. During the next year, Allen must decide whether to invest $10,000 in the stock market or a certificate of deposit (CD) at an interest rate of 9%. If the market is good, Allen 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 that 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 maximize his long-run average return. ANALYSE the best decision that Allen could make in order to have a good return on investment.
Unitary Method
The word “unitary” comes from the word “unit”, which means a single and complete entity. In this method, we find the value of a unit product from the given number of products, and then we solve for the other number of products.
Speed, Time, and Distance
Imagine you and 3 of your friends are planning to go to the playground at 6 in the evening. Your house is one mile away from the playground and one of your friends named Jim must start at 5 pm to reach the playground by walk. The other two friends are 3 miles away.
Profit and Loss
The amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item.
Units and Measurements
Measurements and comparisons are the foundation of science and engineering. We, therefore, need rules that tell us how things are measured and compared. For these measurements and comparisons, we perform certain experiments, and we will need the experiments to set up the devices.
Allen Young has always been proud of his personal investment strategies and has
done very well over the past several years. He invests primarily in the stock market.
Over the past several months, however, Allen has become concerned about the stock
market as a good investment. In some cases, it would have been better for Allen to
have his money in a bank than in the market. During the next year, Allen must decide
whether to invest $10,000 in the stock market or a certificate of deposit (CD) at an
interest rate of 9%. If the market is good, Allen 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 that 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
maximize his long-run average return.
ANALYSE the best decision that Allen could make in order to have a good return on
investment.
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