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Problem $3$

Based on the datapoints shown decide: which investment should be selected based on the highest utility criterion?

$\backslash$table$[[,$Investment Decisions and Payoffs $($EMV$)],[\backslash$table$[[$Investmen$],[$t Vehicle$]],\backslash$table$[[$Large$],[$Gain in$],[$Market$],[$Value$]],\backslash$table$[[$Small Gain$],[$in Market$],[$Value$]],\backslash$table$[[$No$],[$Change$],[$in Market$],[$Value$]],\backslash$table$[[$Small Fall$],[$in Market$],[$Value$]],\backslash$table$[[$Large$],[$Fall in$],[$Market$],[$Value$]],],[$Gold$,-100,100,200,300,0,],[$Bond$,250,200,-150,-100,-150,],[$Stock$,500,250,100,-300,-500,],[$C$/$D$,60,60,60,60,60,],[$Probability$,0\mathrm{.}3,0\mathrm{.}1,0\mathrm{.}3,0\mathrm{.}2,,]]$

a$)$ Which investment should be chosen based on the EMV approach?

b$)$ What is that EMV?

c$)$ Which investment should be chosen based on the Utility approach?

d$)$ What is the Utility value of that investment?