Posted: February 10th, 2016

I have to decide whether to invest $10000 in the stock market or in a CD at the rate of 9%. If the market is good,

I have to decide whether to invest $10000 in the stock market or in a CD at the rate of 9%. If the market is good, I believe I can make a 14% return. If the market is fair , I can make an 8 % return and if the market is bad I would make no return. I estimate that the probability of a good market is .4, the probability of a fair market is .4 and the probability of a bad market is .2.

Develop a decision table for this problem and what is the best decision.