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A local real estate investor in Orlando is considering five alternative investments in which profits may be affected by the cost of gasoline. The following
A local real estate investor in Orlando is considering five alternative investments in which profits may be affected by the cost of gasoline. The following profit payoff table shows the possible return that could result from each investment. Determine the best investment using a minimax regret criterion and determine the best investment using an optimistic decision criterion.
Gasoline Prices and Probabilities |
Increase | Stable | Decrease (0.10) | |
Theater | -30 | 80 | 30 |
Restaurant | 50 | 100 | -40 |
Gift Shop | -80 | -10 | 120 |
Motel | 20 | 20 | 20 |
Amusement Park | 30 | 40 | 50 |
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