Examine the uncertainty for five different investment projec

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Reference no: EM13705683

Work up a simulation model to examine the uncertainty for five different investment projects. p1 = 0.5, p2 = 0.35, p3 = 0.65, p4 = 0.58, p5 = 0.45. The outcomes of the projects should be viewed as independent since the projects are run by different people in the investment market. There is a little doubt in the confidence of these probabilities and they could be off by as much as 0.10 in either direction on any of the five probabilities. PART A) How can you incorporate the uncertainty about the probabilities in your simulation? PART B) If your boss says he is optimistic about one project, he is likely to be optimistic about the other four as well. For the simulation, this means that if one of the probabilities increases, the others are likely to increase as well. How might you incorporate this information into the simulation?

Reference no: EM13705683

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