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ntitative Analysis for Business Decision Making I. Problem Solving (3 Questions,50 pts.) Decision Models] A financial adviser has recommended two possible financial products for investment:

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ntitative Analysis for Business Decision Making I. Problem Solving (3 Questions,50 pts.) Decision Models] A financial adviser has recommended two possible financial products for investment: Stock and Bond. The return that will be achieved by each of these depends on whether economy is good, fair, or poor. A pay-off table has been constructed to illustrate this situation below. A customer is faced with deciding whether to invest or not. (25 pts) Payoff Table States of Nature Poor Economy Good Econom $10,000 $6,000 0.2 Fair Economy 1 Stock 2) Bond Probability $2,000 $4,000 0.3 $5,000 S0 0.5 (a) Determine the optimal action based on the maximin criterion. (4 pts)

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