Answer:
Mr. Manning
a. YHA is the best expected value decision with an expected value of $59,766.
b. HTC is the worst expected value decision.
Explanation:
a) Data and Calculations:
Stock    Market Rising    Market Stable    Market Falling
SUA          $68,082              $47,373              $36,362
YSP           $64,850             $49,320              $44,865
HTC           $57,198             $52,949              $50,605
YHA          $59,766             $59,766              $59,766
Expected Value:
Stock     Market Rising    Market Stable    Market Falling   Expected Value
Probability    60%                   30%                   10%
SUA          $68,082*60%   $47,373*30%    $36,362*10%     =  $58,697
YSP          $64,850*60%   $49,320*30%    $44,865*10%     =     58,163
HTC          $57,198*60%   $52,949*30%    $50,605*10%     =   55,264
YHA         $59,766*60%   $59,766*30%    $59,766*10%     =   59,766
SUA = $40,849.20 + $14,211.90 + $3,636.20 = $58,697.30
YSP = $38,880 + $14,796 + $4,486.50 = $58,162.50
HTC = $34,318.80 + $15,884.70 + $5,060.50 = $55,264
YHA = $35,859.60 + $17,929.80 + $5,976.60 = $59,766