Question: The maximin approach to decision-making a. maximizes the minimum return ob. maximizes the minimum regret O c. maximizes the maximum return od. minimizes the minimum

The maximin approach to decision-making a.

The maximin approach to decision-making a. maximizes the minimum return ob. maximizes the minimum regret O c. maximizes the maximum return od. minimizes the minimum regret Exhibit 14.2 The following questions are based on the information below. An investor is considering 4 investments, A, B, C and leaving his money in the bank. The payoff from each investment is a function of the economic climate over the next 2 years. The economy can expand or decline. The following payoff matrix has been developed for the decision problem. A B D E F H Payoff Matrix Regret Matrix Economy Economy 4 Investment Decline Expand Investment Decline Expand 5 A 0 85 A 6 B 25 65 B 7 40 30 8 Bank 10 10 Bank Refer to Exhibit 14.2. What formula should go in cell F5 of the Regret Matrix above to compute the regret value? a. =MAX(B$5:B$8)-MAX(B5) ob. =MAX(B$5:B$8)-MIN(B$5:B$8) c. =B$5-MAX(B$5:B$8) o d.=MAX(B$5:B$8)-B5 A state of nature O a. is estimated using a decision model of choice o b. is observed oc. is under control of a decision maker od. is known with certainty

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