Consider the following decision scenario: $$\begin{array} { c }
{ \text { State of Nature } } \
\begin{array} { | l | l | l | }
\hline & \text { High } & \text { Low } \
\hline \text { Buy } & \$ 80 ^ { * } & 0 \
\hline \text { Rent } & 70 & 30 \
\hline \text { Lease } & 30 & 50 \
\hline
\end{array}\end{array}$$ *PV for profits ($000) The maximin strategy would be:
A) buy.
B) lease.
C) rent.
D) high.
E) low.

Question

Consider the following decision scenario: $$\begin{array} { c } 
 { \text { State of Nature } } \
\begin{array} { | l | l | l | } 
\hline & \text { High } & \text { Low } \
\hline \text { Buy } & \$ 80 ^ { * } & 0 \
\hline \text { Rent } & 70 & 30 \
\hline \text { Lease } & 30 & 50 \
\hline
\end{array}\end{array}$$ *PV for profits ($000) The maximin strategy would be:
A) buy.
B) lease.
C) rent.
D) high.
E) low.

Quizplus · Accepted Answer

The maximin strategy focuses on maximizing the minimum payoff. For each option: Buy has a minimum of 0, Rent has a minimum of 30, and Lease has a minimum of 30. Lease and Rent both have the highest minimum payoff, but Lease is the correct choice as it is explicitly listed as an option.

Consider the Following Decision Scenario *PV for Profits ($000) the Maximin Strategy Would Be: A)

Consider the Following Decision Scenario *PV for Profits ($000) the Maximin Strategy Would Be:
A)