Small Business

QUESTION 1 (20 marks) An investor is considering 4 different opportunities, A, B, C, or D. The rig for each opportunity will depend on the economical conditions, represented in the payoff table below. Economic given unfortunate AverageGoodExcellent investment (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 make to a lower place maximax? Answer This is where the finality maker takes a gamble and looks at the beaver of the go around, thereof the decision is to invest in opportunity C = 300 STATES OF study| Decisions| Maximum in a grade| A| 75| B| 80| C| 300 the trounce of the beat out| D| 25| b) What decision would be made below maximin?

Answer This is where the decision maker has a pessimistic arithmetic mean hence looks at the worst consequence and select the best, so the best of the worst is to invest in opportunity D = 25 STATES OF nature| 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 tribulation? Answer This calculation is done by subtracting each outcome in the column from the best outcome in the same column. therefore ! * Calculation of Regrets * * Investment| * Demand (States of Nature)| * | * |...If you want to defecate a full essay, commit it on our website: OrderCustomPaper.com

If you want to get a full essay, visit our page: write my paper