Question: Question 10b: Conduct a sensitivity analysis, and provide a sensitivity graph, of the investors decision based on the probability of the state of the economy.

Question 10b: Conduct a sensitivity analysis, and provide a sensitivity graph, of the investors decision based on the probability of the state of the economy.

Problem 1: Analyzing Investments in Stock Selections You are providing advice to novice investor for selecting the best investment choice among two options depicted in the payoff table seen below (showing the expeeted return of a $1,000 investment in each investment alternative at the end of one year in each of the four economic conditions). Investment Option State of the Economy Recession A B Probability 0.1 0.4 Stable economy Moderate growth $50 $90 $1200 $170 - $70 $50 $270 $420 0.3 Boom 0.2

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