Question: 1. Given the payoff matrix below, answer the following questions: Alternative State of Nature #1 #2 #3 #4 A O 2 3 B 2 4

1. Given the payoff matrix below, answer the following questions: Alternative State of Nature #1 #2 #3 #4 A O 2 3 B 2 4 5 6 C 4 3 2 (a) If somehow you find out for certain that state of nature #4 is going to occur, which alternative will you select? (b) If you feel that P(#1) = .3, P(#2) = .4, P(#3) = .2, and P(#4) = .1, (i) What is your expected payoff under certainty? (ii) Which alternative has the highest expected monetary value? (iii) What is your expected value of perfect information

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