Glencore has some funds to invest in developing a new coal mine. However, due to recent...

 

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Glencore has some funds to invest in developing a new coal mine. However, due to recent events it can only afford to make one investment. The choices and pay-offs depend on the size of the coal find and are described in Table 1. Decision Quantity of coal found Low Med High Australia 80 110 130 Chile -20 100 150 India -150 50 200 Probability 0.4 0.1 0.5 Table 1. Payoff table for Glencore's investment decision 1a) Identify which decision would be taken with each of the "decision making under uncertainty" criteria: Maximax; Maximin; Laplace; Minimax; Hurwitz (with = 0.6); and Maximum Likelihood. 1b) Using the "decision making under risk" criteria, calculate all of the following: Expected Monetary Value (EMV); Expected Opportunity Loss; Expected Profit from a Perfect Predictor; Expected Value of Prefect Information. (60%) (40%) Glencore has some funds to invest in developing a new coal mine. However, due to recent events it can only afford to make one investment. The choices and pay-offs depend on the size of the coal find and are described in Table 1. Decision Quantity of coal found Low Med High Australia 80 110 130 Chile -20 100 150 India -150 50 200 Probability 0.4 0.1 0.5 Table 1. Payoff table for Glencore's investment decision 1a) Identify which decision would be taken with each of the "decision making under uncertainty" criteria: Maximax; Maximin; Laplace; Minimax; Hurwitz (with = 0.6); and Maximum Likelihood. 1b) Using the "decision making under risk" criteria, calculate all of the following: Expected Monetary Value (EMV); Expected Opportunity Loss; Expected Profit from a Perfect Predictor; Expected Value of Prefect Information. (60%) (40%)