-Suppose that Nature randomly chooses between a sunny day or a rainy with a 50 percent chance of either. Penelope must decide whether or not to carry an umbrella. Penelope's minimax regret strategy is:
A) Umbrella.
B) No umbrella.
C) Both.
D) Neither.

Question

-Suppose that Nature randomly chooses between a sunny day or a rainy with a 50 percent chance of either. Penelope must decide whether or not to carry an umbrella. Penelope's minimax regret strategy is:
A) Umbrella. 
B) No umbrella. 
C) Both. 
D) Neither.

Quizplus · Accepted Answer

The minimax regret strategy involves choosing the option that minimizes the maximum regret Penelope could experience. Since the regret of not bringing an umbrella on a rainy day and the regret of bringing an umbrella on a sunny day can both be significant (though in different ways), choosing either option (A or B) could lead to regret. However, since the question asks for Penelope's strategy to minimize maximum regret without specifying the exact nature of her regrets, the correct answer is C) Both, implying that she might alternate her choices or consider other factors, as neither choice consistently minimizes regret without further context.

-Suppose That Nature Randomly Chooses Between a Sunny Day or a Rainy