Question (2): Based on what you have studied decision analysis theory, solve the following problem: (10 marks)

	State of Nature
Alternatives	Favorable	Unfavorable
Construct Large firm	400 000	380 000
Construct Small firm	200 000	40 000
Do nothing	0	0
Probabilities	0.5	0.5

From the table above solve the following questions:

1. What is the criterion of realism? Use value of 0.8(4 Marks)
2. Develop an opportunity loss table and determine the mini-max regret decision.

(4 Marks)

3. Find the Expected Monetary value under risk with probability(0.5). (2 marks)