Type: C 4. Decision Models (10 pts) A financial adviser has recommended two possible financial pa investment Stock and Bond. The rehim that will be achieved by each of these depends on whet gou, a, un poor. A pay-off table has been constructed to illustrate this situation below. deciding whether to invest or not. commended two possible financial products for ach of these depends on whether economy is below. A customer is faced with Payoff Table Decision Good Economy (Option 1) Stock $10,000 Option 2) Bond $6,000 For parts (6) - (dbelow, Probability States of Nature Fair Economy $2,000 $4,000 Poor Economy $5,000 $1000 0.3 0.2 0.5 (a) Without consideration of the probability for each state of nature, if you make decisions under uncertainty, what will be the optimal action based on the maximin criterion. (2 pts) (b) When you make decisions under risks with consideration of probability for each state of nature, compute the expected monetary value (EMV) for each decision. (2 pts) (c) When you make decisions under risks with consideration of probability for each state of nature, compute the expected value of perfect information (EVPI) and explain the meaning of it in this problem (2 pts) (d) [Challenging Question) When you make decisions under risks with consideration of probability for each state of nature, suppose there is question about the return of Stock in a good economy. It could be higher or lower than $10,000. What value for this would cause a person to be indifferent between Stock and Bond (Le. the EMVS would be the same.) (Hint Let X = payoff with Stock in good economy, Solve EMV = EMV for X) (4 pts)