The matrix below contains payoffs and their associated probabilities for four alternative investments, each requiring the same initial cash outlay. Investment Payoff Matrix I1 -$500 $190 $300 I2 -$200 $ 50 $300 I3 -$300 $100 $250 I4 -$ 40 $ 70 $180 Probabilities 0.2 0.5 0.3 The investment with the largest expected payoff is a. I3 b. I2 c. I4 d. I1
The matrix below contains payoffs and their associated probabilities for four alternative investments, each requiring the same initial cash outlay. Investment Payoff Matrix I1 -$500 $190 $300 I2 -$200 $ 50 $300 I3 -$300 $100 $250 I4 -$ 40 $ 70 $180 Probabilities 0.2 0.5 0.3 The investment with the largest expected payoff is a. I3 b. I2 c. I4 d. I1
Chapter8: Risk And Rates Of Return
Section: Chapter Questions
Problem 7PROB
Related questions
Question
The matrix below contains payoffs and their associated probabilities for four alternative investments, each requiring the same initial cash outlay.
Investment |
Payoff Matrix |
||
I1 |
-$500 |
$190 |
$300 |
I2 |
-$200 |
$ 50 |
$300 |
I3 |
-$300 |
$100 |
$250 |
I4 |
-$ 40 |
$ 70 |
$180 |
Probabilities |
0.2 |
0.5 |
0.3 |
a. I3
b. I2
c. I4
d. I1
![The matrix below contains payoffs and their associated probabilities for four alternative
investments, each requiring the same initial cash outlay.
Investment
Payoff Matrix
11
-$500
$190
S300
12
-$200
$ 50
$300
13
-$300
$100
$250
14
-$ 40
S 70
$180
Probabilities
0.2
0.5
0.3
The investment with the largest expected payoff is
O a. 13
O b. 12
O c. 14
O d. 1](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F5131f72c-6967-40ce-be8a-eff3bf9240bf%2F0f28973b-355d-4a3a-9e0a-7c0570ddc65d%2Fqdsg30h_processed.png&w=3840&q=75)
Transcribed Image Text:The matrix below contains payoffs and their associated probabilities for four alternative
investments, each requiring the same initial cash outlay.
Investment
Payoff Matrix
11
-$500
$190
S300
12
-$200
$ 50
$300
13
-$300
$100
$250
14
-$ 40
S 70
$180
Probabilities
0.2
0.5
0.3
The investment with the largest expected payoff is
O a. 13
O b. 12
O c. 14
O d. 1
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