1. The price of gas goes for $4 dollars a gallon. As a result of market fluctuation the price in a month is assumed to be 2.50 with a probability of 35% and $4.50 with a probability of 60%. If you had $20,000 to invest.
   
   Which option is the best investment strategy (optimal strategy)?
   
   What is the estimated profit for the chosen investment strategy?
   
   If the estimate of the price in a month is 2.50 with a 35% probability and “X” with a probability of 70% what is the minimum value that “X” need to be for the expected profit to be greater than $6000 with an optimal strategy. Justify the choice of the optimal strategy.
   
   

Answer rating: 100% (QA)

25 35 X 70 profit 60... View the full answer