Calibri ca $%899 Merge & Center- G For Paste BIU A- SH Number 12 Alignment Font Clipboard X f IS H G J LAB F D E 2 N1510 Seminar Activity Week Three 3 4 in M 6 Question One Milo sells raw meat at a local market. Each morning on the way to market he visits a wholesaler to buy inventory. Milo cannot keep the meat cool, so any unsold inventory at the end of the day must be thrown away. After a couple of weeks, he has noticed that each day can be good, ok, or bad, with the following outcomes: 9 ETO 13 15 Good day 40 kilos of meat OK day 30 kilos of meat Bad day 10 kilos of meat He has no idea at the start of each day if it is going to be good, ok, or bad however, He pays 2 per kilo of meat, and sells for 5 per kilo. Required Determine how much meat Milo should buy if he is: 18 19 20 21 22 23 ESS Risk averse A risk seeker Indifferent to risk CN Question Two A few weeks later, Milo looks at his notes, and see that over 18 days trading there have been: 10 good days 3 ok days 5 bad days Required Express as a % the probability of a good, ok and bad day Question Three Required Use expected value to advise Milo on the best quantity to buy. Question Four Required How much would Milo pay to know for certain if a day was going to be good, ok, or bad