Question

You have inherited $10, 000 just prior to a presidential election and wish to invest it in solar energy and oil stocks. An investment advisor provides you with a payoff matrix that indicates your probable 4-year gains, depending on which party comes into office. How should you invest your money so that you would have the largest expected gain irrespective of how the election turns out?

Republican Democrat

Solar $4,000 $1,000

Oil $3,000 $5,000

Answer 1