An investor, who has $100, wants to invest in bonds or
stocks.
If he invests in bonds, there is 40% chance that he gains 10%,
and 60% chance that he gains 12% during the first year. For the
second year, there is 30% chance that he gains 9% and 70% chance
that he gains 7%. If he invests in stocks, there is 30%
chance that he gains 17% and 70% chance that he gains 2% during the
first year. For the second year, there is 50% chance that he gains
8% and 50% chance that he loses 1%. Assume that discount rate is
0.1.
Help her to find out the best investment and calculate how much
will be her profit with both of these investments?
Write your answer in the box below
An investor, who has $100, wants to invest in bonds or stocks. If he invests in bonds, there is 40% chance that he gains
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