Results 1 to 2 of 2

Math Help - Please Help Payoff Matrix !!!

  1. #1
    Newbie
    Joined
    Oct 2007
    Posts
    8

    Please Help Payoff Matrix !!!

    Here it goes....

    In a good economy, stocks pay 8% and bonds pay 4%. In a poor economy, Stocks pay -2% and BOnds pay 5%.

    I need to write a payoffmatrix for this equation.

    Which rows or columns dominate

    If 60% is put in stocks and 40% is put in bonds, what is the expected payoff if the economy is Good?Bad?

    If the probability of a Bad economy is 10% what should be the mix of Stocks and Bonds that would optimize the extracted payoff.
    Follow Math Help Forum on Facebook and Google+

  2. #2
    Newbie
    Joined
    Sep 2007
    Posts
    9

    Payoff Matrix

    [IMG]file:///C:/DOCUME%7E1/BC/LOCALS%7E1/Temp/moz-screenshot.jpg[/IMG][IMG]file:///C:/DOCUME%7E1/BC/LOCALS%7E1/Temp/moz-screenshot-4.jpg[/IMG][IMG]file:///C:/DOCUME%7E1/BC/LOCALS%7E1/Temp/moz-screenshot-5.jpg[/IMG]Please see attached file for the matrix.

    The optimal asset mix is 100% equities since equities have a higher expected return of 7% compared to bonds of 4.1%.
    Attached Files Attached Files
    Follow Math Help Forum on Facebook and Google+

Similar Math Help Forum Discussions

  1. Payoff Matrix
    Posted in the Business Math Forum
    Replies: 3
    Last Post: May 30th 2012, 10:51 AM
  2. Payoff matrix and profit maximising help
    Posted in the Business Math Forum
    Replies: 3
    Last Post: May 5th 2011, 09:11 AM
  3. Game Theory: 3x3 payoff matrix
    Posted in the Business Math Forum
    Replies: 2
    Last Post: March 21st 2010, 07:41 PM
  4. Payoff Matrix - Need Help QUICK!
    Posted in the Business Math Forum
    Replies: 0
    Last Post: October 30th 2008, 07:30 AM
  5. payoff
    Posted in the Advanced Statistics Forum
    Replies: 2
    Last Post: March 22nd 2007, 10:58 AM

Search Tags


/mathhelpforum @mathhelpforum