A farmer in the Cotswolds, United Kingdom, is considering either leasing additional land to grow wheat or placing the money in a bank savings account. If weather conditions are good, the extra land will be a good opportunity to make money; however, if the weather conditions are bad, the farmer will lose money. If the money is placed in the bank, the weather will have no effect on the rate, and the farmer is guaranteed a return. The return for each investment decision is given in the table below.

State of Nature

good

Lease land $100,000

Savings account 20,000

bad

$60,000

20,000

2.

Select the best decision according to the following criteria:

a. Maximax b. Maximin