Using the payoff table ($ million) is shown below, if the probabilities for future mortgage interest rates going up, staying about the same, and going down are 0.35, 0.50 and 0.15, respectively, the expected value with perfect information is ________________________ .

A)$2.5 million
B)$3.625 million
C)$2.75 million
D)$875,000
E)None of the above.

Question

Using the payoff table ($ million) is shown below, if the probabilities for future mortgage interest rates going up, staying about the same, and going down are 0.35, 0.50 and 0.15, respectively, the expected value with perfect information is ________________________ .

A)$2.5 million 
B)$3.625 million 
C)$2.75 million 
D)$875,000 
E)None of the above.

Quizplus · Accepted Answer

The Answer of Using the payoff table ($ million) is shown below, if the probabilities for future mortgage interest rates going up, staying about the same, and going down are 0.35, 0.50 and 0.15, respectively, the expected value with perfect information is ________________________ .

A)$2.5 million 
B)$3.625 million 
C)$2.75 million 
D)$875,000 
E)None of the above.

Using the Payoff Table ($ Million) Is Shown Below, If