Problem One-Maximaxi Criteria

The investor wants to make decision for investment on best alternative under the following given state of nature. Which alternative and what payoff should the investor choose on the basis of the maximax criteria? Show your steps.

Alternatives

State of nature

Good economic condition

Medium condition

Poor economic condition

Apartment building

$50,000

$45,000

&30,000

Office building

$100,000

$70,000

- $40,000

Warehouse building

$30,000

$20,000

$10,000