Question
Lisa is considering various investment options and has assessed potential returns under different scenarios. She believes that investing in stocks could lead to significant gains
Lisa is considering various investment options and has assessed potential returns under different scenarios. She believes that investing in stocks could lead to significant gains in a favorable market. However, this potential return is conditional on both her investment and a positive market trend. In the best-case scenario, a successful investment in stocks could result in a net profit of $50,000. Conversely, if the market turns unfavorable, she anticipates a net loss of $30,000. Alternatively, Lisa is contemplating putting her money in bonds. In a favorable market, this could yield a net profit of $20,000. However, if the market is unfavorable, she expects a smaller net loss of $5,000. Lastly, Lisa could choose to keep her funds in a savings
Question:
a. Construct a decision table for Lisa's investment options, detailing the potential payoffs based on different market conditions
b. Find the Optimistic Criterion
c. Find the Pessimistic Criterion
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