You are trying to determine what stocks to invest in.
Stock a: market is up PhP 20000, if market is unchanged PhP 5000, if market is down Php -15000
Stock b: market is up PhP 10000, if market is unchanged PhP 8000, if market is down Php 6000
Stock c: market is up PhP 100,000, if market is unchanged PhP 0, if market is down Php -50000
Stock b: market is up PhP 15000, if market is unchanged PhP 5000, if market is down Php -10000
1. What would be the investment choices given the following criteria:
Maximin
Maximax
Minimax regret
2. What would be the investment choice if each state of nature would be given an equal probability of occurrence?