Question: 9) PROBLEM 9 (10 marks) The table shows both prospective profits and losses for a company, depending on what decision is made and what state

9) PROBLEM 9 (10 marks) The table shows both prospective profits and losses for a company, depending on what decision is made and what state of nature occurs. Use the information to determine what the company should do. State of Nature Decision d. d. 100 -40 de -80 5 30 Sa -30 Sa 80 30 -10 20 di 120 20 20 a b c. What choice should be made by the optimistic decision maker? (1 mark) What choice should be made by the conservative decision maker? (1.5 mark) What decision should be made under minimax regret? (3,5 marks) If the probabilities of s., Sa, and s are 0.4, 0.5, and 0.1, respectively, then what choice should be made under expected values? (2 marks) What is the EVPI? (2 mark) Note: You are expected to clearly justify your answers. Last Page e

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