HELP PLEASE!!!!!

1. (35 pts) The owner of a small business is considering investment alternatives for his wealth of $100,000. One alternative is to keep it in a savings account that pays interest at rate 15% per year. The second alternative is to invest it in a time-deposit account that will pay interest at rate 18% if the economy is steady, 25% if it is up, and 16% if it is down. The third alternative is to invest in Portfolio X of stocks whose worth will remain the same if the economy is steady, increase by 45% if it is up, and decrease by 30% if it is down. The fourth alternative involves Portfolio Y of stocks whose worth will increase by 10% if the economy is steady, increase by 50% if it is up, and decrease by 25% if it is down. Let p be the probability that the economy will be up and q be the probability that the economy will be down. The last alternative is to invest in a new product, which will be a hit with probability r or a flop with probability 1r. The business owner will double his investment in case of a hit product, but he will lose half of his investment in case of a flop. In other words, if he invests all his money in the new product, he will make a profit of $100,000 if the product is a hit; otherwise, he will lose $50,000 of his investment. He has to choose exactly one of these five alternatives and invest all his money in the selected alternative. He is concerned mainly about the profit he will make on his investment by the end of the year. (a) (5 pts) Draw a decision tree to represent the business owner's problem. (b) (10 pts) Draw the cumulative risk profile for each strategy (for general 0