SOA CFE SDMCorporate Finance & ERM — Strategic Decision Making

A project pays 100 if a regulation passes (p = 0.4) and −30 otherwise; the alternative pays 20 for certain. The expected value of perfect information is:

Describe how you would use scenario planning to set the company's five-year strategy given uncertainty about interest rates and regulatory change. Include how you would build the scenarios, test strategic options against them, and present the results to the board.