mr. brown is looking to invest some money in stock and has four possible options. after consulting with his financial planner, he has the following estimated values of his investment based on the various market outcomes: sua ysp htc yha investment value probability investment value probability investment value probability investment value probability $69,150 55% $65,820 50% $58,205 45% $57,250 65% $48,375 30% $49,320 25% $52,940 35% $50,250 30% $35,365 15% $46,765 25% $49,605 20% $45,250 5%
Mr. brown planner has estimated that the probability the market rises is 60%, stays stable is 30%, and falls is 10%. To assist Mr. Manning in his decision, build a decision tree to model the decision and answer the following question. You do not need to upload your decision tree for this question.
Which stock is the best expected value decision and what is the expected value of that decision?
Which stock is the worst expected value decision?