A home buyer is completing an application for a home mortgage. He is given the option of locking in a mortgage loan interest rate or waiting 60 days until closing and locking in a rate on the day of closing. The buyer is not given the option of locking in at any time in between. If the buyer locks in at the time of application and interest rates go down, the loan will cost him $150 per month more (−$150 payoff) than it would have if he had waited and locked in later. If the buyer locks in at the time of application and interest rates go up, he has saved money by locking in at a lower rate. The amount saved under this condition is a payoff of +$200. If the buyer does not lock in at application and rates go up, he must pay more interest on the mortgage loan; the payoff is −$250. If the buyer does not lock in at application and rates go down, he has reduced the interest amount and the payoff is +$175. If the rate does not change at all, there is a $0 payoff for locking in at the time of application and also a $0 payoff for not locking in at that time. There is a probability of 0.65 that the interest rates will rise by the end of the 60-day period, a 0.30 probability that they will fall, and a 0.05 probability that they will remain constant.
a. Construct a decision table from this information.

b. Compute the EMVs from the table and reach a conclusion about the decision alternatives.
c. Compute the expected value of perfect information.