Use the below payoff table with four mortgage options to answer the following question(s).
-Which of the following decisions is chosen in a minimin strategy?
A)the decision that minimizes the maximum payoff
B)the decision that maximizes the minimum payoff
C)the decision that minimizes the minimum payoff
D)the decision that maximizes the maximum payoff

Question

Use the below payoff table with four mortgage options to answer the following question(s). 
-Which of the following decisions is chosen in a minimin strategy?
A)the decision that minimizes the maximum payoff 
B)the decision that maximizes the minimum payoff 
C)the decision that minimizes the minimum payoff 
D)the decision that maximizes the maximum payoff

Quizplus · Accepted Answer

In a minimin strategy, the decision chosen is the one that minimizes the minimum payoff. Looking at the table, the minimum payoffs for the four mortgage options are 2, 1, 4, and 3. The option with the lowest minimum payoff is Option B, which has a minimum payoff of 1. Therefore, the best choice in a minimin strategy is Option B.

Use the Below Payoff Table with Four Mortgage Options to Answer