Determine the ranking of the remaining actions

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Investment strategy:- An engineer is planning an investment with a time horizon of from six to seven years. He is considering five different investments, as shown in the following table, and has estimated their annual percentage rate of return under four possible future states of the economy. He wants to undertake only one of the investments. Check for dominance, and determine the ranking of the remaining actions on the basis of the following criteria:

(a) Laplace

(b) maximin

(d) Hurwicz (show graph)

(e) minimax regret

Discuss your results: Which would you yourself choose. and why?

525_Table 7.jpg

Reference no: EM131296575

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