Question 1

An intersection or junction point of a decision tree is called a(n)

Accepted Answer

A) node. 
B) stem. 
C) intercept. 
D) branch. 
A) node. 
B) stem. 
C) intercept. 
D) branch. A

Question 2

A(n) _________ refers to the result obtained when a decision alternative is chosen and a chance event occurs.

Accepted Answer

A) payoff table 
B) outcome 
C) state of nature 
D) node 
A) payoff table 
B) outcome 
C) state of nature 
D) node B

Question 3

The minimax regret approach is

Accepted Answer

A) purely optimistic. 
B) purely conservative. 
C) both purely optimistic and purely conservative. 
D) neither purely optimistic nor purely conservative. 
A) purely optimistic. 
B) purely conservative. 
C) both purely optimistic and purely conservative. 
D) neither purely optimistic nor purely conservative. D

Question 4

What would be the value added by a market analysis undertaken if the expected value with sample information is $8.56 million and the expected value without sample information is $6.39 million?

Accepted Answer

A) $8.56 million 
B) $6.39 million 
C) $2.17 million 
D) $14.95 million 
A) $8.56 million 
B) $6.39 million 
C) $2.17 million 
D) $14.95 million

Question 5

For a particular maximization problem, the payoff for the best decision alternative is $15.7 million while the payoff for one of the other alternatives is $12.9 million. The regret associated with the alternate decision would be

Accepted Answer

A) $28.6 million. 
B) $15.7 million. 
C) $0.129 million. 
D) $2.8 million. 
A) $28.6 million. 
B) $15.7 million. 
C) $0.129 million. 
D) $2.8 million.

Question 6

The utility function for money is a curve that depicts the relationship between

Accepted Answer

A) decision alternative and utility. 
B) branch probabilities and utility. 
C) regret and utility. 
D) monetary value and utility. 
A) decision alternative and utility. 
B) branch probabilities and utility. 
C) regret and utility. 
D) monetary value and utility.

Question 7

The states of nature are defined so that they are ___________. This means that at least one state of nature must occur at a given time for a chance event.

Accepted Answer

A) collectively exhaustive 
B) mutually exclusive 
C) certain events 
D) optimistic outcomes 
A) collectively exhaustive 
B) mutually exclusive 
C) certain events 
D) optimistic outcomes

Question 8

No more than one state of nature can occur at a given time for a chance event. This indicates that the states of nature are defined such that they are

Accepted Answer

A) collectively exhaustive. 
B) mutually exclusive. 
C) independent outcomes. 
D) conservative events. 
A) collectively exhaustive. 
B) mutually exclusive. 
C) independent outcomes. 
D) conservative events.

Question 9

The parameter R in an exponential utility function represents the

Accepted Answer

A) decision maker's risk tolerance. 
B) utility function's error tolerance. 
C) posterior probability. 
D) likely profit/loss from the investment. 
A) decision maker's risk tolerance. 
B) utility function's error tolerance. 
C) posterior probability. 
D) likely profit/loss from the investment.

Question 10

Lines showing the alternatives from decision nodes and the outcomes from chance nodes are called

Accepted Answer

A) weights. 
B) payoffs. 
C) diagonals. 
D) branches. 
A) weights. 
B) payoffs. 
C) diagonals. 
D) branches.

Question 11

__________ is a measure of the total worth of a consequence reflecting a decision maker's attitude toward considerations such as profit, loss, and risk.

Accepted Answer

A) Cost-to-company 
B) Utility 
C) Decision value 
D) Regret 
A) Cost-to-company 
B) Utility 
C) Decision value 
D) Regret

Question 12

Using the data below, which of the following would be the posterior probabilities, P(Sj | U)? ?
? $$\begin{array} { c c c } 
\begin{array} { c } 
\text { States of Nature } \
( s j )
\end{array} & \begin{array} { c } 
\text { Prior } \
\text { Probabilities } \
P ( s j )
\end{array} & \begin{array} { c } 
\text { Conditional } \
\text { Probabilities } \
P ( U \mid s j )
\end{array} \
\hline s 1 & 0.65 & 0.75 \
s 2 & 0.20 & 0.35 \
s 3 & 0.15 & 0.20 \
\hline \text { Total } & 1.00 & \
\hline
\end{array}$$ ?

Accepted Answer

A) 0.83, 0.12, and 0.05 
B) 0.49, 0.07, and 0.03 
C) 0.47, 0.49, and 0.04 
D) 1.00, 0.59, and 1.00 
A) 0.83, 0.12, and 0.05 
B) 0.49, 0.07, and 0.03 
C) 0.47, 0.49, and 0.04 
D) 1.00, 0.59, and 1.00

Question 13

Choosing a decision alternative that maximizes the minimum profit is a feature of the __________ approach.

Accepted Answer

A) expected value 
B) optimistic 
C) conservative 
D) maximin regret 
A) expected value 
B) optimistic 
C) conservative 
D) maximin regret

Question 14

_____________ are possible outcomes for chance events that affect the consequences associated with a decision alternative.

Accepted Answer

A) Payoffs 
B) Forecasts 
C) Decision trees 
D) States of nature 
A) Payoffs 
B) Forecasts 
C) Decision trees 
D) States of nature

Question 15

Which of the following tools is used to create decision trees in Excel?

Accepted Answer

A) WhatIf 
B) Analytic Solver Platform 
C) GoalSeek 
D) Data Analysis 
A) WhatIf 
B) Analytic Solver Platform 
C) GoalSeek 
D) Data Analysis

Question 16

___________ are graphical representations of the decision problems that show the sequential nature of the decision-making process.

Accepted Answer

A) Influence diagrams 
B) Utility functions 
C) Decision trees 
D) Payoff tables 
A) Influence diagrams 
B) Utility functions 
C) Decision trees 
D) Payoff tables

Question 17

The weighted average of the payoffs for a chance node is known as the

Accepted Answer

A) median value. 
B) variance of the node. 
C) risk measure. 
D) expected value. 
A) median value. 
B) variance of the node. 
C) risk measure. 
D) expected value.

Question 18

__________ is the study of the possible payoffs and probabilities associated with a decision alternative or a decision strategy in the face of uncertainty.

Accepted Answer

A) Risk analysis 
B) Cost analysis 
C) Certainty analysis 
D) Optimization 
A) Risk analysis 
B) Cost analysis 
C) Certainty analysis 
D) Optimization

Question 19

Chance nodes are

Accepted Answer

A) nodes provided at the end of the states-of-nature branches. 
B) nodes indicating points where an uncertain event will occur. 
C) nodes provided at the end of the decision alternative branches where a payoff is shown. 
D) nodes indicating points where a decision is made. 
A) nodes provided at the end of the states-of-nature branches. 
B) nodes indicating points where an uncertain event will occur. 
C) nodes provided at the end of the decision alternative branches where a payoff is shown. 
D) nodes indicating points where a decision is made.

Question 20

Exponential utility functions assume that the decision maker is

Accepted Answer

A) a risk monitor. 
B) risk averse. 
C) risk neutral. 
D) a risk taker. 
A) a risk monitor. 
B) risk averse. 
C) risk neutral. 
D) a risk taker.

An intersection or junction point of a decision tree is called a(n)

A(n) _________ refers to the result obtained when a decision alternative is chosen and a chance event occurs.

The minimax regret approach is

What would be the value added by a market analysis undertaken if the expected value with sample information is $8.56 million and the expected value without sample information is $6.39 million?

For a particular maximization problem, the payoff for the best decision alternative is $15.7 million while the payoff for one of the other alternatives is $12.9 million. The regret associated with the alternate decision would be

The utility function for money is a curve that depicts the relationship between

The states of nature are defined so that they are ___________. This means that at least one state of nature must occur at a given time for a chance event.

No more than one state of nature can occur at a given time for a chance event. This indicates that the states of nature are defined such that they are

The parameter R in an exponential utility function represents the

Lines showing the alternatives from decision nodes and the outcomes from chance nodes are called

__________ is a measure of the total worth of a consequence reflecting a decision maker's attitude toward considerations such as profit, loss, and risk.

Using the data below, which of the following would be the posterior probabilities, P(S_j| U)? ? ? States of Nature (sj) Prior Probabilities P(sj) Conditional Probabilities P(U\midsj) s1 0.65 0.75 s2 0.20 0.35 s3 0.15 0.20 Total 1.00 ?

Choosing a decision alternative that maximizes the minimum profit is a feature of the __________ approach.

_____________ are possible outcomes for chance events that affect the consequences associated with a decision alternative.

Which of the following tools is used to create decision trees in Excel?

___________ are graphical representations of the decision problems that show the sequential nature of the decision-making process.

The weighted average of the payoffs for a chance node is known as the

__________ is the study of the possible payoffs and probabilities associated with a decision alternative or a decision strategy in the face of uncertainty.

Chance nodes are

Exponential utility functions assume that the decision maker is

Introduction

Descriptive Statistics

Data Visualization

Descriptive Data Mining

Probability: an Introduction to Modeling Uncertainty

Statistical Inference

Linear Regression

Time Series Analysis and Forecasting

Predictive Data Mining

Spreadsheet Models

Monte Carlo Simulation

Linear Optimization Models

Integer Linear Optimization Models

Nonlinear Optimization Models

Filters

Exam 15: Decision Analysis

An intersection or junction point of a decision tree is called a(n)

A(n) _________ refers to the result obtained when a decision alternative is chosen and a chance event occurs.

The minimax regret approach is

What would be the value added by a market analysis undertaken if the expected value with sample information is $8.56 million and the expected value without sample information is $6.39 million?

For a particular maximization problem, the payoff for the best decision alternative is $15.7 million while the payoff for one of the other alternatives is $12.9 million. The regret associated with the alternate decision would be

The utility function for money is a curve that depicts the relationship between

The states of nature are defined so that they are ___________. This means that at least one state of nature must occur at a given time for a chance event.

No more than one state of nature can occur at a given time for a chance event. This indicates that the states of nature are defined such that they are

The parameter R in an exponential utility function represents the

Lines showing the alternatives from decision nodes and the outcomes from chance nodes are called

__________ is a measure of the total worth of a consequence reflecting a decision maker's attitude toward considerations such as profit, loss, and risk.

Using the data below, which of the following would be the posterior probabilities, P(Sj | U)? ? ? States of Nature (sj) Prior Probabilities P(sj) Conditional Probabilities P(U\midsj) s1 0.65 0.75 s2 0.20 0.35 s3 0.15 0.20 Total 1.00 ?

Choosing a decision alternative that maximizes the minimum profit is a feature of the __________ approach.

_____________ are possible outcomes for chance events that affect the consequences associated with a decision alternative.

Which of the following tools is used to create decision trees in Excel?

___________ are graphical representations of the decision problems that show the sequential nature of the decision-making process.

The weighted average of the payoffs for a chance node is known as the

__________ is the study of the possible payoffs and probabilities associated with a decision alternative or a decision strategy in the face of uncertainty.

Chance nodes are

Exponential utility functions assume that the decision maker is

Introduction

Descriptive Statistics

Data Visualization

Descriptive Data Mining

Probability: an Introduction to Modeling Uncertainty

Statistical Inference

Linear Regression

Time Series Analysis and Forecasting

Predictive Data Mining

Spreadsheet Models

Monte Carlo Simulation

Linear Optimization Models

Integer Linear Optimization Models

Nonlinear Optimization Models

Filters

Using the data below, which of the following would be the posterior probabilities, P(S_j| U)? ? ? States of Nature (sj) Prior Probabilities P(sj) Conditional Probabilities P(U\midsj) s1 0.65 0.75 s2 0.20 0.35 s3 0.15 0.20 Total 1.00 ?