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I need your kind assistance in the below question with some explaination, please. Thanks,
An industry has four mutually exclusive investment opportunities, each one yielding different profits depending on the state of the market. There are four possible market states which could arise. The probability of each of these states, together with the incremental profits from each project, are show in the following pay-off table.
Market State
I II III IV
Probability 0.3 0.2 0.4 0.1
Investment Opportunities $ $ $ $
North 38 47 42 44
South 40 70 52 62
East 60 35 48 38
West 46 60 56 58Which of these mutually exclusive projects should be undertaken based on the weighted average probability?
a) North.
b) South.
c) East.
d) West.
e) None of them.Shams, where are these questions coming from?
Surely the book you have got them from gives answers?
I assume that you are not simply trying to learn the topics from these questions and that you have worked through all of our free lectures? Just trying to learn from the questions will certainly mean failure.
The question above can not be examined in Paper F2. It was removed from the syllabus a long time ago!
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