Alexis harrington received an inheritance


Alexis Harrington received an inheritance of $95,000, and she is considering two speculative investmentsthe purchase of land and the purchase of cattle. Each investment would be for 1 year. Under the present (normal) economic conditions, each dollar invested in land will return the principal plus 20% of the principal; each dollar invested in cattle will return the principal plus 30%. However, both investments are relatively risky. If economic conditions were to deteriorate, there is an 18% chance she would lose everything she invested in land and a 30% chance she would lose everything she invested in cattle. Alexis does not want to lose more than $20,000 (on average). She wants to know how much to invest in each alternative to maximize the cash value of the investments at the end of 1 year

Request for Solution File

Ask an Expert for Answer!!
Basic Computer Science: Alexis harrington received an inheritance
Reference No:- TGS082305

Expected delivery within 24 Hours