Mohamed is a financial advisor who has recommended two possible mutual funds for investment: Fund A and
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Question:
Mohamed is a financial advisor who has recommended two possible mutual funds for investment: Fund A and Fund B. The return that will be achieved by each of these depends on whether the economy is good, fair, or poor. A payoff table has been constructed to illustrate this situation:
| Alternative: | Good Economy (BD) | Fair Economy (BD) | Poor Economy (BD) |
| Fund A | 15,000 | 75,000 | (40,000) |
| Fund B | 45,000 | 50,000 | (80,000) |
| No Investment | 0 | 0 | 0 |
| Probabilities | 0.2 | 0.3 | 0.5 |
What decisions would be made the minimum EOL criterion?
a. Fund B
b. Fund A & B
c. Fund A
d. No investment
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