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ANSWER QUESTIONS 9.7, 9.8, AND 9.9 FULLY AND USING EXCEL AND EXCEL FORMULAS FOR ALL ANSWERS. Table 9.4 represents the potential growth rates associated with
ANSWER QUESTIONS 9.7, 9.8, AND 9.9 FULLY AND USING EXCEL AND EXCEL FORMULAS FOR ALL ANSWERS.
Table 9.4 represents the potential growth rates associated with 3 possible investments invest in bonds, stocks, or deposits. (a) What decision would you make if you were optimistic and applied the maximax criterion? (b) What decision would you make if you were pessimistic and applied the maximin criterion? (c) Which method would you use if you were not neither optimistic nor too pessimistic? Apply this method to this problem with a coefficient of optimism alpha = 0.7 The decision maker in X9.7 decides to repeat the calculation but this time the decision making criteria will be dependent upon minimizing regrets. What would the decision maker decide? From your answers to X9.7 and X9.8 comment on which investment opportunity the decision maker should make
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