Using maxi-max to choose an investment option
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An investor is consider 4 different opportunities, A, B, C, or D. The payoff for each opportunity will depend on the economic conditions, represented in the payoff table below.
Economic Condition
Poor Average Good Excellent
Investment (S1) (S2) (S3) (S4)
A 50 75 20 30
B 80 15 40 50
C 100 300 50 10
D 25 25 25 25
What decision would be made under maximax?
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Solution Summary
Four different investment options are given for certain economic conditions. Maxi-max is used to make the investment choice.
Solution Preview
According to the maximax strategy, the option that you would choose under the given circumstances would be to give you the maximum possible gain, regardless of ...
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