Question
The following is a payoff table giving profits for various situations. A,B,C are the states of nature. A B C Alternative 1 120 140 120
The following is a payoff table giving profits for various situations. A,B,C are the states of nature.
| A | B | C | |
| Alternative 1 | 120 | 140 | 120 |
| Alternatiive 2 | 200 | 100 | 50 |
| Alternative 3 | 100 | 120 | 180 |
| Do nothing | 0 | 0 | 0 |
What decision would a pessimist make?
| A. | Alternative 3 | |
| B. | Can't decide because the probabilities are not given | |
| C. | Alternative 1 | |
| D. | Alternative 2 | |
| E. | Do nothing |
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Options Futures And Other Derivatives
Authors: John C. Hull
8th Edition
0132164949, 9780132164948
