Module 4 Take Home Assignment #4 – Risk Management & Decision Making

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Business Finance

Read the notes posted in the reading assignment. Go through Problem 2 and then do the following questions:

  • If ABC Inc. decides to change all references; $115 to $110 and $125 to $130. What is the best decision and its correspondent EMV? (Repeat the same process as discussed in the notes)
  • What decision would a maximin decision maker chooses? Which decision would a maximax decision maker chooses? Would you defend either of these criteria for this particular example?