Problem i$]$

You have been given a large sum of money to invest in three investment opportunities which are shown below. The probabilities and the returns under various states of nature are shown below.

a$.$ Use the expected monetary value criterion to determine the optimal decision.

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$).$

$\backslash$table$[[$Probabilities$,0\mathrm{.}35,0\mathrm{.}45,0\mathrm{.}2],[$Decision Alternative,Market goes up$,\backslash$table$[[$Market stays$],[$the same$]],$Market goes down,,$],[$Stocks $($d$1),$$$,100,000\mathrm{.}00,$$$70,000\mathrm{.}00,$$$,30,000\mathrm{.}00$