The economy are given with their probability of occurrence

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Reference no: EM132226426

States of Economy data is as follow- Solid Growth (40% chance) where Bonds stand to gain 12%, Stocks can gain 15%, and Certificate of Deposits can yield 4.5%, Recessionary conditions (30% chance) where Bonds stand to gain 6%, Stocks can gain -2%, and Certificate of Deposits can yield 4.5%, and Inflationary conditions (30% chance) where Bonds stand to gain 3%, Stocks can gain 4%, and Certificate of Deposits can yield 4.5%. Your company needs to grow its product develop and R&D budget to support various engineering efforts in the coming year. Based on the expected value, which of the investment options (Bonds, Stocks, or CD's) is the best choice, if you need to ensure maximum return on investment. What The states of the economy are given with their probability of occurrence. Show your work.

Reference no: EM132226426

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