Several decision criteria besides EMV are suggested in the section. For each of the following criteria, rank all three decisions in Figure 6.1 from best to worst.

a. Look only at the worst possible outcome for each decision.

b. Look only at the best possible outcome for each decision.

c. Look at the variance of the distribution of outcomes for each decision, which you want to be small. (The variance of a probability distribution is the weighted sum of squared differences from the mean, weighted by the probabilities.)

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1 Decision 1 Decision 2 Decision 3 Payoff/Cost Probability 0.1 0.2 0.7 Payoff/Cost Probability $50,000 $10,000 -$5,000 Payoff/Cost Probability 0.6 0.4 $5,000 -$1,000 $3,000 EMV $3,500l EMV 2,600 EMV 3,000