Exhibit 14.9 The Following Questions Are Based on the Information Below

question 51

Short Answer

Exhibit 14.9
The following questions are based on the information below.
An investor is considering 4 investments, W, X, Y, and Z. The payoff from each investment is a function of the economic climate over the next 2 years. The economy can expand or decline. The following payoff matrix has been developed for the investment decision problem.
-Refer to Exhibit 14.9. Assume the formula =MAX(B5:C5) was entered in cell D5 and copied to cells D6:D8. What formula should go in cell E5 and get copied to cells E6:E8 to place a "<==" to indicate the choice according to the maximax decision rule?

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Definitions:

Spring Tide

A tide that occurs just after a new or full moon, when the difference between high and low tide is greatest due to the alignment of the Sun, Moon, and Earth.

Neap Tide

A tide with the least difference between high and low water levels, occurring when the sun and moon are at right angles to each other.

High Tide

The state of the tide when at its highest level, typically influenced by the gravitational pull of the moon and sun.

Low Tide

The state of the tide when the water level is at its lowest point, exposing areas of the seafloor near coastlines.