Question: Both questions are connected but its the second one I need help with! 10) = Expected value = ElPoolatility & Payoff) Let Payoff for good

Both questions are connected but its the second one I need help with!

10) = Expected value = ElPoolatility & Payoff) Let Payoff for good condition be x 700 Ovo 0-6(x) + 04 ( 200000) x= 1033333 > Decision tree be comes : Payoffs Good Conditions (0,6) $1033333 P2 - 700,000 $200 000 Bad Conditions (0.4) Problem 10: What will be the value of P2 (now it Is ($700.000) when the branch probabilities are reversed:(good conditions to be now 0.4 and the bad condition to be now 0.6) 0700,000 O320,000 O500,000 200,000 O100,000 O-700,000 -100,000 O 10) = Expected value = ElPoolatility & Payoff) Let Payoff for good condition be x 700 Ovo 0-6(x) + 04 ( 200000) x= 1033333 > Decision tree be comes : Payoffs Good Conditions (0,6) $1033333 P2 - 700,000 $200 000 Bad Conditions (0.4) Problem 10: What will be the value of P2 (now it Is ($700.000) when the branch probabilities are reversed:(good conditions to be now 0.4 and the bad condition to be now 0.6) 0700,000 O320,000 O500,000 200,000 O100,000 O-700,000 -100,000 O

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