An Investor Is Considering 4 Investments, A, B, C, D $\quad$

Essay

An investor is considering 4 investments, A, B, C, D. The payoff from each investment is a function of the economic climate over the next 2 years. The economy can be weak or strong. The investor has estimated the probability of a declining economy at 30% and an expanding economy at 70%. Draw the decision tree for this problem and determine the correct decision for this investor based on the expected monetary value criteria.
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text {Payoff Matrix }$
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$$\text {Economy}$
$\begin{array}{ccc}\text { Investment } & \text { Weak } & \text { Strong } \\\hline \text { A } & -30 & 120 \\\text { B } & 20 & 60 \\\text { C } & 30 & 35 \\\text { D } & 15 & 30\end{array}$