Suppose that a business is considering two strategies: buy or sell. If economic conditions improve, then the strategies will return, respectively, 10% and 6%. If economic conditions condition unchanged, then the strategies will return, respectively, 1% and 2%. If economic conditions collapse, then the strategies will return, respectively, - 8% and - 3%. If the states of nature are equally likely, then which strategy would the business select using an expected value criterion?
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