Business Development Model

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8.16 Investment Strong Average Weak Equally likely Stocks 12% 6% -10% 0.0266666667 Bonds 7% 4% 1% 0.04 Highest Money Market 4% 3% 2% 0.03 e. Opportunity Loss Table Investment Strong Average Weak Stocks 0% 0% 12% 12% Bonds 5% 2% 1% 5% Money Market 8% 3% 0% 8% a. if Debbie use maximax criterion, she should choose Stocks with highest perc b. if Debbie use maximin criterion, she should choose Money Market with highe c.if Debbie use equally likely criterion, she should choose Bonds with highest p d.if Debbie use criterion of realism with α=0.5, she should choose Bonds with Maximum for alternatives

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Transcript of Business Development Model

8.16

Investment Strong Average Weak Equally likelyStocks 12% 6% -10% 0.0266666667Bonds 7% 4% 1% 0.04 HighestMoney Market 4% 3% 2% 0.03

e. Opportunity Loss Table

Investment Strong Average WeakStocks 0% 0% 12% 12%Bonds 5% 2% 1% 5%Money Market 8% 3% 0% 8%

a. if Debbie use maximax criterion, she should choose Stocks with highest percentage 12%b. if Debbie use maximin criterion, she should choose Money Market with highest percentage 2%c.if Debbie use equally likely criterion, she should choose Bonds with highest percentage 4%

d.if Debbie use criterion of realism with α=0.5, she should choose Bonds with highest percentage 4%

Maximum for alternatives

0.010.040.03

EMV with α= 0,5

with highest percentage 12% with highest percentage 2%

with highest percentage 4%

Bonds with highest percentage 4%