Question: You are given a table with stocks and there possible payoffs (i.e. 60 payoff will indicate a $60 profit on every $1,000 invested) under each
You are given a table with stocks and there possible payoffs (i.e. 60 payoff will indicate a $60 profit on every $1,000 invested) under each market scenario. Let us assume the probability each market would be turned out is 1/3. Market Scenario Stock Bull Market Mediocre Bear Market Intel -30 90 40 Microsoft 0 50 10 Disney 60 40 0 Shell 30 -10 -70 AT&T -20 -60 40 Please answer to the following statements. 1) Suppose you apply optimistic approach, what is your choice? 2) Suppose you apply minimax regret approach, what is your choice? 3) Suppose you apply expected value approach, what is your choice
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