posted by Deana on .
You have available five different investment strategies and their respective payoffs for various states-of-nature as shown in the chart below. Which investment would you make under the different decision criteria?
States of Nature
Decline Moderate Decline Stable Moderate Advance Strong Advance
T-Bills 3.50 3.50 3.50 3.50 3.50
Paragon (22.50) (2.00) 20.00 35.00 50.00
Luster 28.00 14.70 0.00 (10.00) (20.00)
Apex 10.00 5.00 7.00 45.00 30.00
Market (13.00) 5.00 22.00 38.00 Portfolio 47.00
Probability 0.05 0.35 0.30 0.20 0.10
Note: For the following questions, ¡§Investment¡¨ is the name of the strategy not the number, i.e., Luster, Apex, etc.
c)Equally Likely criteria
d)Criterion of realism (assume ƒÑ = 0.6)
e)Minimax regret criteria
f)Criterion of maximum expected value
Please type your subject in the School Subject box. Any other words, such as what you typed, are likely to delay responses from a teacher who knows that subject well.