Question
People from all over Canada choose to buy property in the Blue Mountains because of the lifestyle and quality of life in Ontario's four-season recreation
People from all over Canada choose to buy property in the Blue Mountains because of the lifestyle and quality of life in Ontario's four-season recreation capital. A Blue Mountains investment property is a smart decision that can provide years of steady income and part-time vacation accommodations. There are two main investment opportunities: townhouses that are suitable for long-term and seasonal rentals; short-term and nightly rental condos. The rental market will affect the profits. The profit/loss estimates per unit per year (in $ thousands) you can see in the payoff table below.
Rental Market Conditions
Investment Weak Stable Strong Very Strong
Townhouses 7 3 15 20
Condos 2 4 9 12
Let us say, we decided to apply the Hurwicz criterion for this decision-making situation. What value of Hurwicz coefficient of realism would make an investor indifferent to the choice between townhouses and condos? Round your answer to 2 decimal places.
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