III. HOME WORK PROBLEMS
2. A LIFE-OR DEATH DECISION PROBLEM
Suppose you have a crucial decision problem, say a serious medical
life-or-death decision involving cancer treatment, or a lifetime marriage
partner choice, between courses of action A and B. By spending one million
dollars under A you will find the best decision for sure vs. a cost
$1Million/x dollars under B to get a decisioin which is guaranteed to
be within the top-5% of all decision choices with probability equal to 0.99.
At what value of x will you be indifferent between the two courses of
action.