Question 1

EMV criteria guarantee good outcomes.

Accepted Answer

A) True 
 B)False

Question 2

In making decisions, we choose the decision with the largest expected monetary value at each node.

Accepted Answer

A) True 
 B)False

Question 3

What is the probability that a randomly selected individual from this population earns less than $50,000 per year?

Accepted Answer

The answer of What is the probability that a randomly...

Question 4

In decision trees, probabilities are listed on probability branches. These probabilities are ____ events that have already been observed.

Accepted Answer

A)  marginal due to 
B)  conditional on 
C)  averaged with 
D)  increased by 
E)  the same as 
A)  marginal due to 
B)  conditional on 
C)  averaged with 
D)  increased by 
E)  the same as

Question 5

Should the network purchase the report if it costs $160,000?

Accepted Answer

@#IMG-DLM& The tree above shows that the market re

Question 6

The mean of the probability distribution is also called the:

Accepted Answer

A)  median 
B)  standard deviation 
C)  variance 
D)  expected value 
E)  normalized point 
A)  median 
B)  standard deviation 
C)  variance 
D)  expected value 
E)  normalized point

Question 7

There are three types of nodes that are used with the decision trees. They are the:

Accepted Answer

A)  mean nodes, variance nodes, and the standard deviation nodes 
B)  probability nodes, risk nodes, and the expected value nodes 
C)  supply nodes, demand nodes, and the expected value nodes 
D)  decision nodes, probability nodes, and end nodes. 
E)  horizontal nodes, vertical nodes, and the diagonal nodes 
A)  mean nodes, variance nodes, and the standard deviation nodes 
B)  probability nodes, risk nodes, and the expected value nodes 
C)  supply nodes, demand nodes, and the expected value nodes 
D)  decision nodes, probability nodes, and end nodes. 
E)  horizontal nodes, vertical nodes, and the diagonal nodes

Question 8

If a randomly selected individual is observed to earn less than $50,000 per year, what is the probability that this person is a woman?

Accepted Answer

The answer of If a randomly selected individual is observed...

Question 9

The following is a payoff table giving profits for various situations:
States of Nature   The probabilities for states of nature A, B, and C are 0.3, 0.5, and 0.2 respectively.
-What are the expected payoffs for the three alternatives?

Accepted Answer

A: 0.3*160+0.5*120+0

Question 10

If a randomly selected individual is observed to earn at least $50,000 per year, what is the probability that this person is a man?

Accepted Answer

The answer of If a randomly selected individual is observed...

Question 11

A buyer for a large sporting goods store chain must place orders for professional footballs with the football manufacturer six months prior to the time the footballs will be sold in the stores. The buyer must decide in November how many footballs to order for sale during the upcoming late summer and fall months. Assume that each football costs the chain $45. Furthermore, assume that each pair can be sold for a retail price of $90. If the footballs are still on the shelves after next Christmas, they can be discounted and sold for $35 each. The probability distribution of consumer demand for these footballs (in hundreds) during the upcoming season has been assessed by the market research specialists and is presented below. Finally, assume that the sporting goods store chain must purchase the footballs in lots of 100 units.  
-Generate a risk profile for each possible decision in this problem. Would this have any impact on your decision?

Accepted Answer

@#IMG-DLM& The risk profile above shows that the o

Question 12

The decision maker now has $10,000 and two possible decisions. For Alternative 1, she loses $500 for certain (x=$9,500). For Alternative 2, she loses $0 (x=$10,000) with probability 0.9 and loses $5,000 (x=$5,000) with probability 0.10. Which alternative maximizes the expected utility of her net wealth?

Accepted Answer

@#IMG-DLM& The tree above, which contain

Question 13

The expected value of sample information (EVSI) is equal to:

Accepted Answer

A)  EMV with posterior information - EMV with prior information 
B)  EMV with free perfect information - EMV free information 
C)  EMV with perfect information - EMV without information 
D)  EMV with free information - EMV without information 
E)  none of these choices 
A)  EMV with posterior information - EMV with prior information 
B)  EMV with free perfect information - EMV free information 
C)  EMV with perfect information - EMV without information 
D)  EMV with free information - EMV without information 
E)  none of these choices

Question 14

Prior probabilities are sometimes called likelihoods, the probabilities that are influenced by information about the outcome of an earlier uncertainty.

Accepted Answer

A) True 
 B)False

Question 15

Utility functions are mathematical functions that transform monetary values - payoffs and costs - into ____.

Accepted Answer

A)  expected values 
B)  utility values 
C)  EMV values 
D)  anchor values 
E)  none of these choices 
A)  expected values 
B)  utility values 
C)  EMV values 
D)  anchor values 
E)  none of these choices

Question 16

Mathematically, the utility function for risk adverse individuals is said to be ____ and/or ____.

Accepted Answer

A)  decreasing , linear 
B)  decreasing , convex 
C)  increasing , linear 
D)  increasing , concave 
E)  increasing , decreasing 
A)  decreasing , linear 
B)  decreasing , convex 
C)  increasing , linear 
D)  increasing , concave 
E)  increasing , decreasing

Question 17

Using a strategy region graph, determine what impact, if any, the insurance premium cost has on her decision. Briefly explain your answer

Accepted Answer

If the insurance premium were to increas

Question 18

A buyer for a large sporting goods store chain must place orders for professional footballs with the football manufacturer six months prior to the time the footballs will be sold in the stores. The buyer must decide in November how many footballs to order for sale during the upcoming late summer and fall months. Assume that each football costs the chain $45. Furthermore, assume that each pair can be sold for a retail price of $90. If the footballs are still on the shelves after next Christmas, they can be discounted and sold for $35 each. The probability distribution of consumer demand for these footballs (in hundreds) during the upcoming season has been assessed by the market research specialists and is presented below. Finally, assume that the sporting goods store chain must purchase the footballs in lots of 100 units.  
-Construct a decision tree to identify the buyer's course of action that maximizes the expected profit earned by the chain from the purchase and subsequent sale of footballs in the coming year.

Accepted Answer

The answer of A buyer for a large sporting goods...

Question 19

What is Bayes' Rule?

Accepted Answer

A)  a rule that provides a mathematical way of updating probabilities as new information becomes available 
B)  a rule that provides a mathematical way of calculating EMV 
C)  a rule that provides a mathematical way of calculating EVI 
D)  all of these choices 
E)  none of these choices 
A)  a rule that provides a mathematical way of updating probabilities as new information becomes available 
B)  a rule that provides a mathematical way of calculating EMV 
C)  a rule that provides a mathematical way of calculating EVI 
D)  all of these choices 
E)  none of these choices

Question 20

FMV provides a rational way of making decisions:

Accepted Answer

A)  under all circumstances 
B)  when there is one outcome 
C)  at least when the monetary payoffs and costs are of "moderate" size relative to the decision maker's wealth 
D)  at least when the monetary payoffs and costs are large relative to the decision maker's wealth 
E)  under none of these situations 
A)  under all circumstances 
B)  when there is one outcome 
C)  at least when the monetary payoffs and costs are of "moderate" size relative to the decision maker's wealth 
D)  at least when the monetary payoffs and costs are large relative to the decision maker's wealth 
E)  under none of these situations

EMV criteria guarantee good outcomes.

In making decisions, we choose the decision with the largest expected monetary value at each node.

What is the probability that a randomly selected individual from this population earns less than $50,000 per year?

In decision trees, probabilities are listed on probability branches. These probabilities are ____ events that have already been observed.

Should the network purchase the report if it costs $160,000?

The mean of the probability distribution is also called the:

There are three types of nodes that are used with the decision trees. They are the:

If a randomly selected individual is observed to earn less than $50,000 per year, what is the probability that this person is a woman?

The following is a payoff table giving profits for various situations: States of Nature The probabilities for states of nature A, B, and C are 0.3, 0.5, and 0.2 respectively. -What are the expected payoffs for the three alternatives?

If a randomly selected individual is observed to earn at least $50,000 per year, what is the probability that this person is a man?

The expected value of sample information (EVSI) is equal to:

Prior probabilities are sometimes called likelihoods, the probabilities that are influenced by information about the outcome of an earlier uncertainty.

Utility functions are mathematical functions that transform monetary values - payoffs and costs - into ____.

Mathematically, the utility function for risk adverse individuals is said to be and/or .

Using a strategy region graph, determine what impact, if any, the insurance premium cost has on her decision. Briefly explain your answer

What is Bayes' Rule?

FMV provides a rational way of making decisions:

Introduction to Business Analytics

Describing the Distribution of a Single Variable

Finding Relationships Among Variables

Probability and Probability Distributions

Normal, Binomial, Poisson, and Exponential Distributions

Sampling and Sampling Distributions

Confidence Interval Estimation

Hypothesis Testing

Regression Analysis: Estimating Relationships

Regression Analysis: Statistical Inference

Time Series Analysis and Forecasting

Introduction to Optimization Modeling

Optimization Models

Introduction to Simulation Modeling

Simulation Models

Data Mining

Importing Data Into Excel

Analysis of Variance and Experimental Design

Statistical Process Control

Filters

Exam 6: Decision Making Under Uncertainty

EMV criteria guarantee good outcomes.

In making decisions, we choose the decision with the largest expected monetary value at each node.

What is the probability that a randomly selected individual from this population earns less than $50,000 per year?

In decision trees, probabilities are listed on probability branches. These probabilities are ____ events that have already been observed.

Should the network purchase the report if it costs $160,000?

The mean of the probability distribution is also called the:

There are three types of nodes that are used with the decision trees. They are the:

If a randomly selected individual is observed to earn less than $50,000 per year, what is the probability that this person is a woman?

The following is a payoff table giving profits for various situations: States of Nature The probabilities for states of nature A, B, and C are 0.3, 0.5, and 0.2 respectively. -What are the expected payoffs for the three alternatives?

If a randomly selected individual is observed to earn at least $50,000 per year, what is the probability that this person is a man?

The expected value of sample information (EVSI) is equal to:

Prior probabilities are sometimes called likelihoods, the probabilities that are influenced by information about the outcome of an earlier uncertainty.

Utility functions are mathematical functions that transform monetary values - payoffs and costs - into ____.

Mathematically, the utility function for risk adverse individuals is said to be ____ and/or ____.

Using a strategy region graph, determine what impact, if any, the insurance premium cost has on her decision. Briefly explain your answer

What is Bayes' Rule?

FMV provides a rational way of making decisions:

Introduction to Business Analytics

Describing the Distribution of a Single Variable

Finding Relationships Among Variables

Probability and Probability Distributions

Normal, Binomial, Poisson, and Exponential Distributions

Sampling and Sampling Distributions

Confidence Interval Estimation

Hypothesis Testing

Regression Analysis: Estimating Relationships

Regression Analysis: Statistical Inference

Time Series Analysis and Forecasting

Introduction to Optimization Modeling

Optimization Models

Introduction to Simulation Modeling

Simulation Models

Data Mining

Importing Data Into Excel

Analysis of Variance and Experimental Design

Statistical Process Control

Filters

Mathematically, the utility function for risk adverse individuals is said to be and/or .