After researching ETF funds, an investor learns that out of 10,000 ETFs,…

After researching ETF funds, an investor learns that out of 10,000 ETFs, 1,000 outperform S&P500 and 9000 do not. A research analysis has a track record with accuracy of 70% (analysis says buy when ETF outperforms, don’t buy when ETF underperforms). Without having an access to the research analysis, what is the probability that the investor chooses an ETF that outperforms? Without having an access to the research analysis, what is the probability that the investor chooses an ETF that underperforms? What is the probability that research analysis will recommend an ETF as a buy? What is the probability that research analysis will recommend an ETF as a do-not-buy? What is the probability that an investor invests in an outperform ETF if the research analysis says buy? What is the probability that an investor invests in an undeperform ETF if the research analysis says do not buy? What can you conclude about the value of the research analysis (i.e. how much is it worth compare to just choosing an ETF randomly)? Housing A company must decide whether to leave its model homes unfurnished, furnished with minimal accessories, or completely furnish them using a custom decorator. The result of the decision is affected on the condition of the housing market. The following is the payoff table:

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ISDS 361B Group Project 3 Answer all questions and show work/calculation/excel output. ETF After researching ETF funds, an investor learns that out of 10,000 ETFs, 1,000 outperform S&P500 and 9000 do not. A research analysis has a track record with accuracy of 70% (analysis says buy when ETF outperforms, don’t buy when ETF underperforms). Without having an access to the research analysis, what is the probability that the investor chooses an ETF that outperforms? Without having an access to the research analysis, what is the probability that the investor chooses an ETF that underperforms? What is the probability that research analysis will recommend an ETF as a buy? What is the probability that research analysis will recommend an ETF as a do-not-buy? What is the probability that an investor invests in an outperform ETF if the research analysis says buy? What is the probability that an investor invests in an undeperform ETF if the research analysis says do not buy? What can you conclude about the value of the research analysis (i.e. how much is it worth compare to just choosing an ETF randomly)? Housing A company must decide whether to leave its model homes unfurnished, furnished with minimal accessories, or completely furnish them using a custom decorator. The result of the decision is affected on the condition of the housing market. The following is the payoff table: Weak Moderate Strong Very Strong Unfurnished -$2000 $1500 $3000 $4500 Minimal -4500 $750 $5000 $7000 Custom -$6500 $2000 $4000 $10000 They have an internal forecaster who thinks that: P(weak)=0.2 P(moderate)=0.4 P(strong)=0.3 P(very strong)=0.1
They also consider to hire a consultant who to conduct economic forecasting for improving the probability estimate. Based on his past experience, these are his predictions: P(economy rise|weak market)=0.4 P(economy rise|moderate market)=0.7 P(economy rise|strong market)=0.8 P(economy rise|very strong market)=1 P(economy down|weak market)=0.6 P(economy…

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