You have inherited $10,000 just prior to a presidential election and wish to invest it in solar

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You have inherited $10,000 just prior to a presidential election and wish to invest it in solar energy and oil stocks. An investment advisor provides you with a payoff matrix that indicates your probable 4-year gains, depending on which party comes into office. How should you invest your money so that you would have the largest expected gain irrespective of how the election turns out?

Player C (fate) Republican Democrat $4,000 $3,000 Player R Solar energy [$1,000 (you) Oil $5,000

For a one-time play (investment), you would split your investment proportional to the entries in your optimal strategy matrix. Assume that fate is a very clever player. Then if fate deviates from its optimal strategy, you know you will not do any worse than the value of the game, and you may do better.

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Finite Mathematics For Business Economics Life Sciences And Social Sciences

ISBN: 9780134862620

14th Edition

Authors: Raymond Barnett, Michael Ziegler, Karl Byleen, Christopher Stocker

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