Question: After reading about economic predictions, Debbie Gibson has assigned the probability that the economy will be strong, average, and weak at 0.2, 0.35, and 0.45, respectively.
(a) Using EMVs, what option should Debbie choose? What is the maximum EMV?
(b) Using EOL, what option should Debbie choose? What is the minimum EOL?
(c) Compute the EVPI and show that it is the same as the minimum EOL.