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A member of a successful music band is considering leaving the band to pursue a solo career. If she stays with the band she estimates that there is a 60% chance that the band will continue to be successful and she would earn $1.7 million over the next three years. If the band's success does not continue she would still earn $0.6 million over the next three years under her existing contract. If she embarks on a solo career she estimates that the chance of success is 20%. A successful solo career will bring her $4 million in the next three years. If her solo career is not successful, she can expect to earn only $0.25 in the next three years. What should she do?

Econometrics, Economics

  • Category:- Econometrics
  • Reference No.:- M9495168

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