Exercise #$2$: Mr$.$ Lopez has considered investing some money he has inherited. The following payoff table presents the profits that will be realized during the next year for each of the three alternatives being considered:

Decision Good economy $($$$)$ Poor economy $($$$)$

Stocks $$80,000-$$$20,000$

Bonds $$30,000$ $$20,000$

Certificates of Deposit $$23,000$ $$23,000$

Probability $0\mathrm{.}50\mathrm{.}5$

a$.$ Which decision can maximize the expected profit?

b$.$ What is the maximum amount that should be paid based on a perfect projection of the economy?

c$.$ Which decision can minimize the expected loss opportunity?

d$.$ What is the minimum EOL?