Q1, Briefly summarize the major events in the history of decision theory. 50 marks

Q2. A friend offers you to invest all your savings, $100,000, in his dot com company. You find it very hard to understand the business plan he presents to you, but your friend tells you that your $100,000 will certainly be worth at least $10M within two years. Naturally, your friend may be right, but he may also be wrong - you feel that you cannot estimate the probabilities for this. Consider the decision matrix below.

	Friend is right	Friend is wrong
Invest	$10M	$0
Do not	$100,000	$100,000

What is wrong with this formalisation?. 50 marks