Question: James has $ 1 0 0 , 0 0 0 to invest. One option is to place it in the stock market, where in a

James has $100,000 to invest. One option is to place it in the stock market, where in a good market, he will receive a 12% return but in a poor market he could lose 10%. A second option is to place money into bonds. A good market will yield him 5% but a poor market will generate only 1%. A third option is to put (1)/(2) in stocks and (1)/(2) in bonds. A fourth option is to invest in a CD at a local bank which will pay a guaranteed 2.5%. Build a decison table for James. James believes there is a 30% chance of a good market. James might be willing to pay for information about the market. What would be his EVPI?

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