As a manager of The Steadfast Fund in the Using Statistic Scenario, you need ...

     As a manager of The Steadfast Fund in the Using Statistic   Scenario, you need to decide between two stocks to purchase for a short-term   investment of one year. An economist at the company has predicted returns for   the two stocks under four economic conditions: recession, stability, moderate   growth, and boom.   The table   represents the predicted one-year return from $1,000 investment in each stock   under each economic condition.   Payoff Table   for Steadfast Fund   Alternative States of Nature    Recession   Stock A 30   Stock B -50   2.   Use   the Optimistic (maximax) approach to select the best stock. (1 Mark)   3.   Use   the Pessimistic (maximin) approach to select the best stock. (1 Mark)   4.   Use   the Equally Likely approach to select the best stock. (2 Marks)   5.   Use   the Hurwicz (Criterion of Realism) approach to select the best stock ∝ =   0.6 (2 Marks)   6.   Calculate   EMV using the probabilities; recession 0.15, stability 0.3, moderate growth   0.4, boom 0.15 and select the best option. (4 Marks)