42. Suppose that the payoff functions of two actions are P (oi, y) = 50 + .5y and P(a2, y) = 70— .5/x, where y is the mean of a normal process with variance 1200.

(a) Find the breakeven value, /i&.

(b) If the prior distribution is a normal distribution with mean M' — 25 and variance

(c) What is the value of perfect information that y = 115?

(d) What is the value of perfect information that y = 121?

(e) What is the expected value of perfect information?

(f) Graph the payoff functions and the associated loss functions.

(g) What would the expected value of perfect information be if the prior mean M' = 30? Explain the difference between this answer and the answer to (e).