Question: Two projects are being considered. One and only one must be selected. Project Dalmatia has a 20% chance of earning $10M and an 80% chance

Two projects are being considered. One and only one must be selected.

Project Dalmatia has a 20% chance of earning $10M and an 80% chance of losing $2M.

Project Istria has a 50% chance of earning $600K and a 50% chance of losing $200K.

1. Which project should be selected, and why (show calculations)?

2. List some important decision factors that would cause a Portfolio Manager to change their decision from the one indicated by these calculations.

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