1) Using the Maximax Criterion (Optimistic Approach), which decision is preferred?

Investment A

Investment B

Investment C

2) Using the Maximin Criterion (Conservative Approach), which decision is preferred?

Investment A

Investment B

Investment C

3) Using the Maximum Likelihood Criterion, which decision is preferred?

Investment A

Investment B

Investment C

4) Using the Expected Value Approach, which decision is preferred?

Investment A

Investment B

Investment C

A firm has three investment alternatives. The following table lists the payoffs in thousands of dollars: Economic Conditions Decision Alternative Up (S) Stable (S2) Down (S3) Investment A (d) 100 25 0 Investment B (dz) 75 50 25 Investment C (d3) 50 50 Probabilities 0.3 0.3 50 0.4