Probability of tripling her investment
Business Management
An investor is considering two alternatives for which she has Rs. 1,00,000 to invest. The first is commercial property; the second is stocks. Analysis has revealed that the property alternative offers a 0.50 probability of tripling her investment and a .30 probability of losing 60% of the entire amount and a 0.20 probability of make it half. The stock alternative has a .30 probability of making the investment double and .50 probability of remain the same value and .20 probability of losing 75% of the investment. her choices are (1) invest the entire amount in one or the other; (2) invest half her fund in one and remaining half in other and (3) make no investment. Suggest the investment plan which will maximize her utility?
