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Q 1. (8 marks) [CLO 1, 2] Ali wants to invest in stocks. He has three alternatives along with different probabilities. The table below shows conditional values for the various alternatives (stocking decision) and states of nature (size of crowd). All values are in US Dollars Large Average Small Alternative 1 9,08,000 Alternative 2 Alternative 310 -1,500 5,000 6,000 15,000 7,000 18,000 12,000 If the probabilities associated with the states of nature are 0.20 for a large crowd, 0.30 for an average crowd, and 0.50 for a small crowd, determine: (a) The optimal alternative if the concessionaire is an optimist. (b) The optimal alternative if the concessionaire is a pessimist. The alternative that provides the greatest expected monetary value (EMV) (c (d) The expected value of perfect information (EVPI). (e) The opportunity loss table. () Minimum expected opportunity loss (EOL)

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