Exhibit 14.5 The Following Questions Are Based on the Information Below

Multiple Choice

Exhibit 14.5
The following questions are based on the information below.
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 expand or decline.The following decision tree has been developed for the problem.The investor has estimated the probability of a declining economy at 40% and an expanding economy at 60%.
-Refer to Exhibit 14.5.What is the correct decision for this investor based on an expected monetary value criteria?

A) A
B) B
C) C
D) D