Problem 2-Decision Analysis PART 1 . Dr. Jacobs West is an investment manager for Prokop Investments. He is currently faced with the question of which company to invest in. There are five potential investment companies located in Waterloo, Vancouver, Calgary, Yellowknife, and New York. Ignacio must make this investment (i.e.no option to forego the investment). The level of interest rates impacts the profit from each investment The following profits in millions of dollars) are indicated below . City of Investment Waterloo Vancouver Calgary Yellow Knife New York Prior Prob LEVEL OF INTEREST RATE LowModerate $24.00$20.00 $28.00$15.00 $20.00$ 20.00 $20.00$18.00 $40.00 $ 22.00 0.50.3 High $15.00 $10.00 $ 20.00 $ 16.00 $12.00 0.2 1) Are there any dominated or absolutely dominated alternatives? 2) Ignoring prior probability, what is the best decision: a. Using optimistic criteria b. Using pessimistic criteria C. Using the minimax regret approach 3) Using prior probabilities a. What is the best decision using the expected value approach? b. What is the best decision using expected opportunity loss? 4) What is the expected value of perfect information (EVPI) PART 2 . The management team wants to decide whether or not to hire an economist, Dr. Icarus Crane, to predict future interest rates. The economist can only predict if there will be high interest rates or low interest rates. In the past, when interest rates were low, the economist predicted high interest rates 10% of the time. When interest rates were moderate, the economist predicted high interest rates 40\% of the time; when interest rates were high, the economist predicted high interest rates 80% of the time. The economist is charging $100,000. Using the information above 5) Draw a decision tree for the scenario above 6) Calculate posterior probabilities for the tree 7) Calculate the Expected value of Sample Information (EVSI) 8) Calculate the efficiency of the sample .