You Are Evaluating Investment Alternatives for a Ski Resort If You Use the EMV Criterion, the Probability That the Four

question 49

Multiple Choice

You are evaluating investment alternatives for a ski resort.There are four alternative investments and their payoffs (in $10,000s) are shown in the following table, depending on the snow conditions for the next season. $\begin{array}{r}\text { Snow Conditions }\\\begin{array}{ccc}\text { Investment } & \text { Good } & \text { Bad } \\d_{1} & 3 & 1 \\d_{2} & 8 & 0 \\d_{3} & 12 & -4 \\d_{4} & 18 & -12\end{array}\end{array}$
If you use the EMV criterion, the probability that the snow conditions are good is p, and you decide investment d₃, what is the expected value of perfect information?

• A)12p + 3
• B)2p + 3
• C)p + 35
• D)p + 2
• E)p + 1

---

Definitions:

Epidermis

The outermost layer of the skin, providing a waterproof barrier and creating our skin tone.

Cornea

Transparent portion of the fibrous tunic that makes up the outer wall of the anterior portion of the eye.

Right Lymphatic Duct

Lymphatic duct that empties into the right subclavian vein; drains the right side of the head and neck, the right-upper thorax, and the right-upper limb.

Lymph

A clear fluid that circulates through the lymphatic system, carrying white blood cells and supporting the body's immune system.