READ THE INSTRUCTIONS CAREFULLYI + 2 > - Your test should be handwritten. Upload your answers into the Dropbox made specifically for this test on BeachBoard. If your handwriting is not easily readable, no grade will be assigned to what you wrote. Make sure to have neat handwritingi - Plagiarism will NOT be tolerated. You can use the book (open book exam) but nothing else! - Please do not violate the word limits as I will NOT read or give points for anything that fails to adhere to the directions. 1) Dr. Saboori and his business partner Clark A. Shabani found a real estate academy which has to decide on a location for their annual symposium on real estate investments. Two locations are being considered: the Heraton hotel in New York and the campus of Atlantic University. The profit that the academy will earn from the symposium depends on the cost of the location and the number of delegates attending. The cost to the Academy of holding the symposium at the Heraton will be a fixed charge of $14000 plus and extra $100 per delegate. The Atlantic University will charge $10,000 plus an extra $120 per delegate. Delegates will pay $300 to attend the symposium, irrespective of which location is chosen. The number of delegates attending the symposium is likely to depend on the location. For simplicity, subjective probability distributions for the number of delegates attending at each location have been approximated by the three-point distributions shown below. Heraton hotel Atlantic University No. of delegates attending Probability No. of delegates attending Probability 02 60 0.4 at each location have been approximated by the three-point distributions shown below. Heraton hotel Atlantic University No. of delegates attending Probability No. of delegates attending Probability 50 100 150 0.2 0.5 0.3 60 100 140 0.4 0.5 0.1 a) Identify the location that will maximize the expected profit earned by the Academy. b) What reservations do you think the Academy should have about using your analysis in part (a) to choose the location for the symposium? c) After a utility elicitation session, the Academy's treasurer is able to make the following statements: "I would be indifferent between earning a profit of $15,200 for certain and taking a gamble which had a 0.99 probability of yielding a profit of $16000 and a 0.01 probability of yielding a loss of $4000" "I would be indifferent between earning a profit of $8000 for certain and taking a gamble which had a 0.92 probability of yielding a profit of $16000 and a 0.08 probability of to