Exhibit 14.2 The Following Questions Are Based on the Information Below

Multiple Choice

Exhibit 14.2
The following questions are based on the information below.
An investor is considering 4 investments, A, B, C and leaving his money in the bank. The payoff from each investment is a function of the economic climate over the next 2 years. The economy can expand or decline. The following payoff matrix has been developed for the decision problem.
-How are states of nature assigned probabilities?

A) Use historical data.
B) Use best judgement.
C) Use interview results.
D) All of these.