Equal probability of occurrence

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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?

Reference no: EM13964897

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