Mickey Lawson is considering investing some money that he inherited. The following payoff table gives the profits that would be realized during the next year for each of three investment alternatives Mickey is considering:
State of Nature
Decision Alternative Good Economy Poor Economy
Stock Market 80000 -20000
Bonds 40000 21000
CDs 25000 25000
Probability .5 .5
1.) Develop an opportunity loss table for the investment problem that Mickey Lawson faces.
2.) What decision would minimize the expected opportunity loss?
3.) What is the minimum EOL?