F 7 H j 1 Problem 2. 2 You have been given a large sum of money to invest in three investment opportunities which are shown below. 3 The probabilities and the returns under various states of nature are shown below. 4 5 a. Use the expected monetary value criterion to determine the optimal decision. 6 b. Show that the expected opportunity loss criterion leads to the same decision recommended by the expected monetary value criterion. c. Determine the expected value of perfect information (EVPI). 8 9 10 Probabilities 0.35 0.45 0.2 Market goes Market stays Market goes 11 Decision Alternative down up the same 12 Stocks (dl) $ 100,000.00 $ 70,000.00 $30,000.00 13 Mutual Fund (2) $ 95,000.00 $ 85,000.00 $20,000.00 14 Keep Cash (d3) $ 73,000.00 $73,000.00 $73,000.00 15