Question 1

Look at the utility function graphed below and select the type of decision maker that corresponds to the graph.

Accepted Answer

A) Risk averter 
B) Risk neutral 
C) Risk taker 
D) Risk player   
A) Risk averter 
B) Risk neutral 
C) Risk taker 
D) Risk player

Question 2

A medical doctor is involved in a $1 million malpractice suit.He can either settle out of court for $250,000 or go to court.If he goes to court and loses, he must pay $825,000 plus $175,000 in court costs.If he wins in court the plaintiffs pay the court costs.Identify the outcomes of this decision-making problem.

Accepted Answer

A) Two choices: (1)go to court and (2)settle out of court. 
B) Two possibilities: (1)win the case in court and (2)lose the case in court. 
C) Four consequences resulting from Go/Settle and Win/Lose combinations. 
D) The amount of money paid by the doctor. 
A) Two choices: (1)go to court and (2)settle out of court. 
B) Two possibilities: (1)win the case in court and (2)lose the case in court. 
C) Four consequences resulting from Go/Settle and Win/Lose combinations. 
D) The amount of money paid by the doctor.

Question 3

SCENARIO 20-1 The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature.   where:  
-Referring to Scenario 20-1, the opportunity loss for A2 when S1 occurs is

Accepted Answer

A) - 2 
B) 0 
C) 5 
D) 14 
A) - 2 
B) 0 
C) 5 
D) 14

Question 4

In portfolio analysis, the _______ is the reciprocal of the return to risk ratio.

Accepted Answer

coefficien

Question 5

SCENARIO 20-2 The following payoff matrix is given in dollars.   Suppose the probability of Event 1 is 0.5 and Event 2 is 0.5.
-Referring to Scenario 20-2, the EVPI is

Accepted Answer

A) 0 
B) 300 
C) 400 
D) 600 
A) 0 
B) 300 
C) 400 
D) 600

Question 6

The curve for the will show a rapid increase in utility for initial amounts of money followed by a gradual leveling off for increasing dollar amounts.

Accepted Answer

A) risk taker 
B) risk averter 
C) risk neutral 
D) profit seeker 
A) risk taker 
B) risk averter 
C) risk neutral 
D) profit seeker

Question 7

A medical doctor is involved in a $1 million malpractice suit.He can either settle out of court for $250,000 or go to court.If he goes to court and loses, he must pay $825,000 plus $175,000 in court costs.If he wins in court the plaintiffs pay the court costs.Identify the actions of this decision-making problem.

Accepted Answer

A) Two choices: (1)go to court and (2)settle out of court. 
B) Two possibilities: (1)win the case in court and (2)lose the case in court. 
C) Four consequences resulting from Go/Settle and Win/Lose combinations. 
D) The amount of money paid by the doctor. 
A) Two choices: (1)go to court and (2)settle out of court. 
B) Two possibilities: (1)win the case in court and (2)lose the case in court. 
C) Four consequences resulting from Go/Settle and Win/Lose combinations. 
D) The amount of money paid by the doctor.

Question 8

Blossom's Flowers purchases roses for sale for Valentine's Day.The roses are purchased for $10 a dozen and are sold for $20 a dozen.Any roses not sold on Valentine's Day can be sold for $5 per dozen.The owner will purchase 1 of 3 amounts of roses for Valentine's Day: 100, 200, or 400 dozen roses.Given 0.2, 0.4, and 0.4 are the probabilities for the sale of 100, 200, or 400 dozen roses, respectively, then the optimal EMV for buying roses is

Accepted Answer

A) $700 
B) $900 
C) $1,700 
D) $1,900 
A) $700 
B) $900 
C) $1,700 
D) $1,900

Question 9

SCENARIO 20-2 The following payoff matrix is given in dollars.   Suppose the probability of Event 1 is 0.5 and Event 2 is 0.5.
-Referring to Scenario 20-2, the expected profit under certainty (EPUC )is

Accepted Answer

A) 0 
B) 300 
C) 500 
D) 600 
A) 0 
B) 300 
C) 500 
D) 600

Question 10

Look at the utility function graphed below and select the type of decision maker that corresponds to the graph.

Accepted Answer

A) Risk averter 
B) Risk neutral 
C) Risk taker 
D) Risk player   
A) Risk averter 
B) Risk neutral 
C) Risk taker 
D) Risk player

Question 11

SCENARIO 20-6 A student wanted to find out the optimal strategy to study for a Business Statistics exam with scores out of 100 possible points.He constructed the following payoff table based on the mean amount of time he needed to study every week for the course and the degree of difficulty of the exam.From the information that he gathered from students who had taken the course, he concluded that there was a 40% probability that the exam would be easy.  
-Referring to Scenario 20-6, the optimal strategy using the coefficient of variation criterion is to study 8 hours per week on average for the exam.

Accepted Answer

A) True 
 B)False

Question 12

SCENARIO 20-2 The following payoff matrix is given in dollars.   Suppose the probability of Event 1 is 0.5 and Event 2 is 0.5.
-Referring to Scenario 20-2, the return to risk ratio for Action B is

Accepted Answer

A) 0.167 
B) 3.0 
C) 6.0 
D) 9.0 
A) 0.167 
B) 3.0 
C) 6.0 
D) 9.0

Question 13

SCENARIO 20-5 The following payoff table shows profits associated with a set of 2 alternatives under 3 possible events.   Suppose that the probability of Event 1 is 0.2, Event 2 is 0.5, and Event 3 is 0.3.
-Referring to Scenario 20-5, what is the opportunity loss for Action A with Event 1?

Accepted Answer

The answer of SCENARIO 20-5 The following payoff table shows...

Question 14

For a potential investment of $5,000, a portfolio has an EMV of $1,000 and a standard deviation of $100.What is the coefficient of variation?

Accepted Answer

A) 10% 
B) 20% 
C) 50% 
D) 100% 
A) 10% 
B) 20% 
C) 50% 
D) 100%

Question 15

The risk seeker's curve represents the utility of one who enjoys taking risks.Therefore, the slope of the utility curve becomes for large dollar amounts.

Accepted Answer

A) smaller 
B) stable 
C) larger 
D) uncertain 
A) smaller 
B) stable 
C) larger 
D) uncertain

Question 16

A tabular presentation that shows the outcome for each decision alternative under the various states of nature is called:

Accepted Answer

A) a payback period matrix. 
B) a decision matrix. 
C) a decision tree. 
D) a payoff table. 
A) a payback period matrix. 
B) a decision matrix. 
C) a decision tree. 
D) a payoff table.

Question 17

Blossom's Flowers purchases roses for sale for Valentine's Day.The roses are purchased for $10 a dozen and are sold for $20 a dozen.Any roses not sold on Valentine's Day can be sold for $5 per dozen.The owner will purchase 1 of 3 amounts of roses for Valentine's Day: 100, 200, or 400 dozen roses.The payoff for buying 200 dozen roses and selling 100 dozen roses at the full price is

Accepted Answer

A) $2,000 
B) $1,000 
C) $500 
D) - $500 
A) $2,000 
B) $1,000 
C) $500 
D) - $500

Question 18

Blossom's Flowers purchases roses for sale for Valentine's Day.The roses are purchased for $10 a dozen and are sold for $20 a dozen.Any roses not sold on Valentine's Day can be sold for $5 per dozen.The owner will purchase 1 of 3 amounts of roses for Valentine's Day: 100, 200, or 400 dozen roses.The opportunity loss for buying 400 dozen roses and selling 200 dozen roses at the full price is

Accepted Answer

A) - $2,000 
B) $1,000 
C) $500 
D) $0 
A) - $2,000 
B) $1,000 
C) $500 
D) $0

Question 19

The risk- _______ curve represents the expected monetary value approach.

Accepted Answer

The answer of The risk- _______ curve represents the expected...

Question 20

Blossom's Flowers purchases roses for sale for Valentine's Day.The roses are purchased for $10 a dozen and are sold for $20 a dozen.Any roses not sold on Valentine's Day can be sold for $5 per dozen.The owner will purchase 1 of 3 amounts of roses for Valentine's Day: 100, 200, or 400 dozen roses.Given 0.2, 0.4, and 0.4 are the probabilities for the sale of 100, 200, or 400 dozen roses, respectively, then the EVPI for buying roses is

Accepted Answer

A) $700 
B) $1,500 
C) $1,900 
D) $2,600 
A) $700 
B) $1,500 
C) $1,900 
D) $2,600

Look at the utility function graphed below and select the type of decision maker that corresponds to the graph.

SCENARIO 20-1 The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature. where: -Referring to Scenario 20-1, the opportunity loss for A2 when S1 occurs is

In portfolio analysis, the _______ is the reciprocal of the return to risk ratio.

SCENARIO 20-2 The following payoff matrix is given in dollars. Suppose the probability of Event 1 is 0.5 and Event 2 is 0.5. -Referring to Scenario 20-2, the EVPI is

The curve for the will show a rapid increase in utility for initial amounts of money followed by a gradual leveling off for increasing dollar amounts.

SCENARIO 20-2 The following payoff matrix is given in dollars. Suppose the probability of Event 1 is 0.5 and Event 2 is 0.5. -Referring to Scenario 20-2, the expected profit under certainty (EPUC )is

Look at the utility function graphed below and select the type of decision maker that corresponds to the graph.

SCENARIO 20-2 The following payoff matrix is given in dollars. Suppose the probability of Event 1 is 0.5 and Event 2 is 0.5. -Referring to Scenario 20-2, the return to risk ratio for Action B is

SCENARIO 20-5 The following payoff table shows profits associated with a set of 2 alternatives under 3 possible events. Suppose that the probability of Event 1 is 0.2, Event 2 is 0.5, and Event 3 is 0.3. -Referring to Scenario 20-5, what is the opportunity loss for Action A with Event 1?

For a potential investment of $5,000, a portfolio has an EMV of $1,000 and a standard deviation of $100.What is the coefficient of variation?

The risk seeker's curve represents the utility of one who enjoys taking risks.Therefore, the slope of the utility curve becomes for large dollar amounts.

A tabular presentation that shows the outcome for each decision alternative under the various states of nature is called:

The risk- _______ curve represents the expected monetary value approach.

Defining and Collecting Data

Organizing and Visualizing Variables

Numerical Descriptive Measures

Basic Probability

Discrete Probability Distributions

The Normal Distributions and Other Continuous Distributions

Sampling Distributions

Confidence Interval Estimation

Fundamentals of Hypothesis Testing: One-Sample Tests

Two-Sample Tests

Analysis of Variance

Chi-Square and Nonparametric Tests

Simple Linear Regression

Introduction to Multiple Regression

Multiple Regression Model Building

Time-Series Forecasting

Business Analytics

A Roadmap for Analyzing Data

Statistical Applications in Quality Management Online

Understanding Statistics: Descriptive and Inferential Techniques

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Exam 20: Decision Making Online

Look at the utility function graphed below and select the type of decision maker that corresponds to the graph.

SCENARIO 20-1 The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature. where: -Referring to Scenario 20-1, the opportunity loss for A2 when S1 occurs is

In portfolio analysis, the _______ is the reciprocal of the return to risk ratio.

SCENARIO 20-2 The following payoff matrix is given in dollars. Suppose the probability of Event 1 is 0.5 and Event 2 is 0.5. -Referring to Scenario 20-2, the EVPI is

The curve for the will show a rapid increase in utility for initial amounts of money followed by a gradual leveling off for increasing dollar amounts.

SCENARIO 20-2 The following payoff matrix is given in dollars. Suppose the probability of Event 1 is 0.5 and Event 2 is 0.5. -Referring to Scenario 20-2, the expected profit under certainty (EPUC )is

Look at the utility function graphed below and select the type of decision maker that corresponds to the graph.

SCENARIO 20-2 The following payoff matrix is given in dollars. Suppose the probability of Event 1 is 0.5 and Event 2 is 0.5. -Referring to Scenario 20-2, the return to risk ratio for Action B is

SCENARIO 20-5 The following payoff table shows profits associated with a set of 2 alternatives under 3 possible events. Suppose that the probability of Event 1 is 0.2, Event 2 is 0.5, and Event 3 is 0.3. -Referring to Scenario 20-5, what is the opportunity loss for Action A with Event 1?

For a potential investment of $5,000, a portfolio has an EMV of $1,000 and a standard deviation of $100.What is the coefficient of variation?

The risk seeker's curve represents the utility of one who enjoys taking risks.Therefore, the slope of the utility curve becomes for large dollar amounts.

A tabular presentation that shows the outcome for each decision alternative under the various states of nature is called:

The risk- _______ curve represents the expected monetary value approach.

Defining and Collecting Data

Organizing and Visualizing Variables

Numerical Descriptive Measures

Basic Probability

Discrete Probability Distributions

The Normal Distributions and Other Continuous Distributions

Sampling Distributions

Confidence Interval Estimation

Fundamentals of Hypothesis Testing: One-Sample Tests

Two-Sample Tests

Analysis of Variance

Chi-Square and Nonparametric Tests

Simple Linear Regression

Introduction to Multiple Regression

Multiple Regression Model Building

Time-Series Forecasting

Business Analytics

A Roadmap for Analyzing Data

Statistical Applications in Quality Management Online

Understanding Statistics: Descriptive and Inferential Techniques

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