Description
Complete the problems found in the attached Module Seven Homework Questions document.
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Explanation & Answer
Hello buddy, above is a solution to the assignment. Please go through it and let me know of any need for an adjustment or a clarification. Thank you
Buddy, here you have it all. Thank you
Second
month
First month
Probability
Status
Status
(P1)
Increases
Increases
Increases
Remains
Remains
Remains
Decreases
Decreases
Decreases
Total
Probability
Probability
(P2)
0.3
0.3
0.3
0.5
0.5
0.5
0.2
0.2
0.2
Increases
Remains
Decreases
Increases
Remains
Decreases
Increases
Remains
Decreases
(P1 x P2)
0.5
0.25
0.25
0.25
0.5
0.25
0.5
0.25
0.25
0.15
0.075
0.075
0.125
0.25
0.125
0.1
0.05
0.05
Total
Total
Cost
4,800
2,400
0
2,400
0
-2,400
0
-2,400
-4,800
Expected
Value
(Total
Probability X
Total Cost)
720
180
0
300
0
-300
0
-120
-240
540
$6,000
0
0.1
0.12
0.15
0.19
0.21
0.26
0.3
1
Monetary Value
Utility
Monetary
Value
($4,800)
($2,900)
($2,400)
($1,000)
($500)
$0
$1,900
$2,400
$4,800
$4,000
$2,000
$0
0
0.2
0.4
($2,000)
($4,000)
($6,000)
2. In the second strategy
Status
Probability
Value
Utility
Effective Utility
Increases
0.3
-2400
0.12
0.036
Remains
0.5
0
0.21
0.105
Decrease
0.2
2400
0.3
0.06
s
Fixed
500
0.19
0.19
Cost
Total Utility
0.391
3. Strategy 3
Month 1
Status
Month 2
Probability
Status
Probability
Total Probability
Status
Increases
Increases
Increases
Remains
Remains
Remains
Decrease
s
De...