2. The payoff table below indicates the returns (in RM thousands) of an investment in stock, bond, and fixed deposit, and the probabilities of the economic conditions. Economic Situation Returns (RM000) Type of investment Good Stable Poor Stock 150 60 -30 Bond 50 40 36 30 45 45 Fixed Deposit Probability 0.3 0.5 0.2 a) What is the best decision

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2. The payoff table below indicates the returns (in RM thousands) of an investment in stock, bond, and fixed deposit, and the probabilities of the economic conditions. Economic Situation Returns (RM000) Type of investment Good Stable Poor Stock 150 60 -30 Bond 50 40 36 30 45 45 Fixed Deposit Probability 0.3 0.5 0.2 a) What is the best decision under risk using the EMV method? b) What is the expected monetary value (EMV) of the decision?

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