Investment Advisors estimated the stock market returns for four market segments: computers, financial, manufacturing and

pharmaceuticals. The annual return projections vary depending on whether general economic conditions are improving, stable or

declining. The anticipated annual return percentages for each market segment under each economic condition are as follows:

	Improving	Stable	Declining
Computers	10	2	-4
Financial	8	5	-3
Manufacturing	6	4	-2
Pharmaceutical	6	5	-1

What is the chance event?

	a.	Economic Condition
	b.	There is no chance event.
	c.	The market segment.
	d.	The annual return.

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QUESTION 3

What respective segment should be targeted under optimistic, conservative and regret approaches?

-	Optimistic
	Conservative
	Min Max Regret
	Min Max Regret

A.	Computers, Improving.
B.	Financial Improving
C.	Financial Declining
D.	Pharmaceutical, Declining

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QUESTION 4

The payoffs under the respective decisions for optimistic, conservative and regret are respectively:

	Payoff (%)
optimist
conservative
regret option 1
regret option 2