Exhibit 14.1 The Following Questions Are Based on the Information Below

question 46

Multiple Choice

Exhibit 14.1
The following questions are based on the information below.
An investor is considering 4 investments, A, B, C and leaving his money in the bank. 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 decision problem.
-Refer to Exhibit 14.1. What formula should go in cell D5 to implement the maximax decision rule?

• A) =MAX(MAX(B5:C5))
• B) =MIN(B5:C5)
• C) =AVERAGE(B5:C5)
• D) =MAX(B5:C5)

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