Reference no: EM132445915

On the tapas menu in a local Spanish restaurant customers can order a dish of 20 roasted chillies for £5. There is always a mixture of hot chillies and mild chillies on the dish and these cannot be distinguished except by taste. The restaurant produces two types of dish: one containing 4 hot and 16 mild chillies and one containing 8 hot and 12 mild chillies. When the dish is served, the waiter allows the customer to taste one chilli and then offers a 50% discount to customers who correctly guess whether the dish contains 4 hot chillies or 8 hot chillies. A hungry actuary who regularly visits the restaurant is trying to work out the best strategy for guessing the number of hot chillies.

• List the four possible decision functions the actuary could use.