Suppose that the payoff from an investment depends upon market conditions. A great market has a payoff of $200,000, a normal market has a payoff of $100,000, and a poor market has a payoff of $20,000. What is the Laplace criterion value?
What will be an ideal response?
($200,000 + $100,000 + $20,000 ) / 3 = $320,000/3 = $106,667
Business
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