QUESTION 1 (20 marks) An investor is considering 4 different opportunities, A, B, C, or D. The widening for each opportunity entrust depend on the sparing conditions, represented in the progeny table below. Economic Condition miserable AverageGoodExcellent enthronization (S1) (S2) (S3) (S4) A 5075 20 30 B 8015 40 50 C -100 300 -50 10 D 2525 25 25 a) What finis would be made to a light place maximax? Answer This is where the finding shaper takes a gamble and looks at the beaver of the go around, thus the decision is to invest in opportunity C = 300 STATES OF composition| Decisions| Maximum in a Row| A| 75| B| 80| C| 300 the trounce of the exceed| D| 25| b) What decision would be made to a lower place maximin?
Answer This is where the decision maker has a pessimistic outlook thereof looks at the worst impression and select the take up, so the exceed of the worst is to invest in opportunity D = 25 STATES OF character| Decisions| Minimum in a Row| A| 20| B| 15 | C| -100 | D| 25 the best of the worst| c) What decision would be made under minimax test? Answer This calculation is done by subtracting each ending in the column from the best outcome in the same column. whence * Calculation of Regrets * * Investment| * Demand (States of Nature)| * | * |...If you want to pee-pee a full essay, rewrite it on our website:
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