There are 4 investment alternatives and 3 states of nature: The market can go up, go down or stay unchanged. An example

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There Are 4 Investment Alternatives And 3 States Of Nature The Market Can Go Up Go Down Or Stay Unchanged An Example 1 (50.67 KiB) Viewed 19 times

There are 4 investment alternatives and 3 states of nature: The market can go up, go down or stay unchanged. An example of the payoff matrix is as below. A B C D 1 Probability 25% 40% 35% 2 Go down Stay unchanged Go up 3 Alternative 1 125 130 150 4 Alternative 2 45 100 200 5 Alternative 3 -10 90 250 ) There is an analyst who knows when the market will go down with 100% accuracy. But when he claims that the market will go up, it really goes up by 90%, and stay unchanged by 10% of the cases. When he claims that the market will stay unchanged, it really happens by 80% and market go up by 20%. What is the value of this imperfect information that predicts the market's direction?