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QUESTION
3-19Mickey Lawson is considering investing some money that he inherited.
Q: 3-19Mickey 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 the three investment alternatives Mickey is considering:State of Nature Decision Good Poor Alternative Economy EconomyStock market 80,000 -20,000Bonds 30,000 20,000CDs 23,000 23,000Probability 0.5 0.5(a) What decision would maximize expected profits?(b)What is the maximum amount that should be paid for a perfect forecast of the economy?
