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Teton Village contains shops, restaurants and motels. They have two peak seasons, winter for skiing, and summer, for tourists visiting nearby parks. Using these seasonal

Teton Village contains shops, restaurants and motels. They have two peak seasons, winter for skiing, and summer, for tourists visiting nearby parks. Using these seasonal indexes, explain the typical index for the winter season.

Seasonal Indexes

Year

Winter

Spring

Summer

Fall

1

1.283

0.75

2

1.178

0.827

1.223

0.778

3

1.152

0.855

1.209

0.755

4

1.205

0.789

1.298

0.687

5

1.239

0.794

Mean

1.194

0.817

1.253

0.742

Total sales for the winter season are typically 19.4% below the annual average.

Total sales for the winter season are typically 119.4% above the annual average.

Total sales for the winter season are typically 19.4% above the annual average.

Total sales for the winter season are typically 119.4% below the annual average

You are trying to decide in which of the three companies you should invest. If the market declines in the next year, which of the following statements is correct?

Payoff Table

States of Nature

Invest in

Probability

Company A

Company B

Company C

Market rise

2000

2200

1800

0.6

Market decline

900

1000

1150

0.4

The Opportunity Loss for Company A is $250.

The Opportunity Loss for Company B is $30.

The Opportunity Loss for Company C is $500.

All statements are correct.

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