Based on available information, a student develops a tree. What is the optimum decision and

expected value for that decision? Show work.

Payoff

$($$ millions$)$

$(\mathrm{.}5)$ Large Market

$5\mathrm{.}0$

$-2\mathrm{.}0$

$2\mathrm{.}2$

$1\mathrm{.}2$

$3\mathrm{.}0$

$1\mathrm{.}0$

$1\mathrm{.}2$

$1\mathrm{.}9$

$1\mathrm{.}3$

$1\mathrm{.}0$

What is the optimum decision?

What is the EV with the optimum decision?

$3.$ While monitoring the forecast values, the tracking signals are consistently coming out as large negative numbers $($i$.$e$.,-3\mathrm{.}5,-5\mathrm{.}9,-7\mathrm{.}8).$ What should we do$?$