Question 1

You are offered an investment opportunity. Its outcomes and probabilities are presented in the following table:   Which of the following statements is true?

Accepted Answer

A)  This distribution is skewed to the right. 
B)  This is a binomial distribution. 
C)  This distribution is symmetric. 
D)  This distribution is skewed to the left. 
E)  This is a Poisson distribution. 
A)  This distribution is skewed to the right. 
B)  This is a binomial distribution. 
C)  This distribution is symmetric. 
D)  This distribution is skewed to the left. 
E)  This is a Poisson distribution.

Question 2

In a decision-making under uncertainty scenario, the decision maker chooses the decision alternative that has the minimum expected (i.e., probability-weighted) payoff among all the available alternatives.

Accepted Answer

A) True 
 B)False

Question 3

In a decision-making scenario, if it is $\textbf{     not    }$  known which of the states of nature will occur but the probabilities of occurrence of the states are known the scenario is called decision-making under risk.

Accepted Answer

A) True 
 B)False

Question 4

In decision-making under risk, the expected monetary payoff of perfect information is the weighted average of the best payoff for each state of nature (using the probability of the state of nature as the weight).

Accepted Answer

A) True 
 B)False

Question 5

The expected monetary value without information is $60, and the expected monetary payoff with perfect information is $120. The expected value of perfect information is

Accepted Answer

A)  $60. 
B)  $2. 
C)  $180. 
D)  $0.50. 
E)  $120. 
A)  $60. 
B)  $2. 
C)  $180. 
D)  $0.50. 
E)  $120.

Question 6

In a decision analysis problem, variables (such as investing in common stocks or corporate bonds) which are under the decision maker's control are called decision alternatives.

Accepted Answer

A) True 
 B)False

Question 7

The speed at which a jet plane can fly is an example of ___.

Accepted Answer

A)  neither discrete nor continuous random variable 
B)  both discrete and continuous random variable 
C)  a continuous random variable 
D)  a discrete random variable 
E)  a constant 
A)  neither discrete nor continuous random variable 
B)  both discrete and continuous random variable 
C)  a continuous random variable 
D)  a discrete random variable 
E)  a constant

Question 8

The amount of time a patient waits in a doctor's office is an example of a continuous random variable.

Accepted Answer

A) True 
 B)False

Question 9

In a decision analysis problem, variables (such as benefits or rewards that result from investments in common stocks or corporate bonds and from a new product launch) which result from selecting a particular decision alternative are called posterior probabilities.

Accepted Answer

A) True 
 B)False

Question 10

A market research team compiled the following discrete probability distribution for families residing in Pictou County. In this distribution, x represents the number of evenings the family dines outside their home during a week:   The mean (average) value of x is ___.

Accepted Answer

A)  1.0 
B)  1.5 
C)  2.0 
D)  2.5 
E)  3.0 
A)  1.0 
B)  1.5 
C)  2.0 
D)  2.5 
E)  3.0

Question 11

The variance of a discrete distribution increases if we add a positive constant to each one of its value.

Accepted Answer

A) True 
 B)False

Question 12

Dan Hein owns the mineral and drilling rights to a 1,000 acre tract of land. If he drills a well and does $\textbf{      not    }$strike oil his net loss will be $50,000, but if he drills a well and strikes oil his net gain will be $100,000. If he does$\textbf{         not }$  drill, his loss is the cost of the mineral and drilling rights, which amount to $1000. For Dan's decision problem, the variable "oil in the tract" is one of the

Accepted Answer

A)  payoffs. 
B)  decision alternatives. 
C)  states of nature. 
D)  revised probabilities. 
E)  prior probabilities. 
A)  payoffs. 
B)  decision alternatives. 
C)  states of nature. 
D)  revised probabilities. 
E)  prior probabilities.

Question 13

The value of perfect information is the difference between the monetary payoff with perfect information and the expected monetary payoff with no information.

Accepted Answer

A) True 
 B)False

Question 14

A market research team compiled the following discrete probability distribution on the number of soft drinks the average adult drinks each day. In this distribution, x represents the number of sodas which an adult drinks:   The mean (average) value of x is ___.

Accepted Answer

A)  1.4 
B)  1.75 
C)  2.10 
D)  2.55 
E)  3.02 
A)  1.4 
B)  1.75 
C)  2.10 
D)  2.55 
E)  3.02

Question 15

In a decision-making scenario, if the decision maker knows which state of nature will occur, the scenario is called decision-making under certainty.

Accepted Answer

A) True 
 B)False

Question 16

In American Roulette, there are two zeroes and 36 non-zero numbers (18 red and 18 black). If a player bets 1 unit on red, his chance of winning 1 unit is therefore 18/38 and his chance of losing 1 unit (or winning -1) is 20/38. Let x be the player profit per game. The mean (average) value of x is approximately ___.

Accepted Answer

A)  0.0526 
B)  -0.0526 
C)  1 
D)  -1 
E)  0 
A)  0.0526 
B)  -0.0526 
C)  1 
D)  -1 
E)  0

Question 17

The expected monetary value without information is $2,500, and the expected monetary payoff with perfect information is $5,000. The expected value of perfect information is

Accepted Answer

A)  $7,500. 
B)  $2,500. 
C)  $1,500. 
D)  $2,000. 
E)  $1,250. 
A)  $7,500. 
B)  $2,500. 
C)  $1,500. 
D)  $2,000. 
E)  $1,250.

Question 18

A market research team compiled the following discrete probability distribution for families residing in Randolph County. In this distribution, x represents the number of evenings the family dines outside their home during a week:
   Determine the mean (average) value and standard deviation of x.

Accepted Answer

@#IMG-DLM&
 Mean = @#IMG-DLM&

Question 19

Dan Hein owns the mineral and drilling rights to a 1,000 acre tract of land. If he drills a well and does $\textbf{     not     }$strike oil his net loss will be $50,000, but if he drills a well and strikes oil his net gain will be $100,000. If he does $\textbf{         not }$ drill, his loss is the cost of the mineral and drilling rights, which amount to $1000. For Dan's decision problem, the variable "net loss of $50,000" is one of the

Accepted Answer

A)  payoffs. 
B)  decision alternatives. 
C)  states of nature. 
D)  revised probabilities. 
E)  prior probabilities. 
A)  payoffs. 
B)  decision alternatives. 
C)  states of nature. 
D)  revised probabilities. 
E)  prior probabilities.

Question 20

To compute the variance of a discrete distribution, it is $\textbf{      not    }$ necessary to know the mean of the distribution.

Accepted Answer

A) True 
 B)False

You are offered an investment opportunity. Its outcomes and probabilities are presented in the following table: Which of the following statements is true?

In a decision-making under uncertainty scenario, the decision maker chooses the decision alternative that has the minimum expected (i.e., probability-weighted) payoff among all the available alternatives.

In a decision-making scenario, if it is $\textbf{ not }$ known which of the states of nature will occur but the probabilities of occurrence of the states are known the scenario is called decision-making under risk.

In decision-making under risk, the expected monetary payoff of perfect information is the weighted average of the best payoff for each state of nature (using the probability of the state of nature as the weight).

The expected monetary value without information is $60, and the expected monetary payoff with perfect information is $120. The expected value of perfect information is

In a decision analysis problem, variables (such as investing in common stocks or corporate bonds) which are under the decision maker's control are called decision alternatives.

The speed at which a jet plane can fly is an example of ___.

The amount of time a patient waits in a doctor's office is an example of a continuous random variable.

In a decision analysis problem, variables (such as benefits or rewards that result from investments in common stocks or corporate bonds and from a new product launch) which result from selecting a particular decision alternative are called posterior probabilities.

A market research team compiled the following discrete probability distribution for families residing in Pictou County. In this distribution, x represents the number of evenings the family dines outside their home during a week: The mean (average) value of x is ___.

The variance of a discrete distribution increases if we add a positive constant to each one of its value.

The value of perfect information is the difference between the monetary payoff with perfect information and the expected monetary payoff with no information.

A market research team compiled the following discrete probability distribution on the number of soft drinks the average adult drinks each day. In this distribution, x represents the number of sodas which an adult drinks: The mean (average) value of x is ___.

In a decision-making scenario, if the decision maker knows which state of nature will occur, the scenario is called decision-making under certainty.

The expected monetary value without information is $2,500, and the expected monetary payoff with perfect information is $5,000. The expected value of perfect information is

A market research team compiled the following discrete probability distribution for families residing in Randolph County. In this distribution, x represents the number of evenings the family dines outside their home during a week: Determine the mean (average) value and standard deviation of x.

To compute the variance of a discrete distribution, it is $\textbf{ not }$ necessary to know the mean of the distribution.

Introduction to Statistics

Organizing and Visualizing Data

Descriptive Statistics

Gathering Data

Probability

Discrete Probability Distributions

Continuous Distributions

Sampling Distributions

Confidence Intervals

Hypothesis Testing for Single Populations

Hypothesis Testing for Two Populations

Analysis of Variance Anova

Linear Correlation and Simple Linear Regression Analysis

Categorical Versus Categorical: Tests

Filters

Exam 6: Decision Analysis and Expected Value

You are offered an investment opportunity. Its outcomes and probabilities are presented in the following table: Which of the following statements is true?

In a decision-making under uncertainty scenario, the decision maker chooses the decision alternative that has the minimum expected (i.e., probability-weighted) payoff among all the available alternatives.

In a decision-making scenario, if it is not \textbf{ not } not known which of the states of nature will occur but the probabilities of occurrence of the states are known the scenario is called decision-making under risk.

In decision-making under risk, the expected monetary payoff of perfect information is the weighted average of the best payoff for each state of nature (using the probability of the state of nature as the weight).

The expected monetary value without information is $60, and the expected monetary payoff with perfect information is $120. The expected value of perfect information is

In a decision analysis problem, variables (such as investing in common stocks or corporate bonds) which are under the decision maker's control are called decision alternatives.

The speed at which a jet plane can fly is an example of ___.

The amount of time a patient waits in a doctor's office is an example of a continuous random variable.

In a decision analysis problem, variables (such as benefits or rewards that result from investments in common stocks or corporate bonds and from a new product launch) which result from selecting a particular decision alternative are called posterior probabilities.

A market research team compiled the following discrete probability distribution for families residing in Pictou County. In this distribution, x represents the number of evenings the family dines outside their home during a week: The mean (average) value of x is ___.

The variance of a discrete distribution increases if we add a positive constant to each one of its value.

The value of perfect information is the difference between the monetary payoff with perfect information and the expected monetary payoff with no information.

A market research team compiled the following discrete probability distribution on the number of soft drinks the average adult drinks each day. In this distribution, x represents the number of sodas which an adult drinks: The mean (average) value of x is ___.

In a decision-making scenario, if the decision maker knows which state of nature will occur, the scenario is called decision-making under certainty.

The expected monetary value without information is $2,500, and the expected monetary payoff with perfect information is $5,000. The expected value of perfect information is

A market research team compiled the following discrete probability distribution for families residing in Randolph County. In this distribution, x represents the number of evenings the family dines outside their home during a week: Determine the mean (average) value and standard deviation of x.

To compute the variance of a discrete distribution, it is not \textbf{ not } not necessary to know the mean of the distribution.

Introduction to Statistics

Organizing and Visualizing Data

Descriptive Statistics

Gathering Data

Probability

Discrete Probability Distributions

Continuous Distributions

Sampling Distributions

Confidence Intervals

Hypothesis Testing for Single Populations

Hypothesis Testing for Two Populations

Analysis of Variance Anova

Linear Correlation and Simple Linear Regression Analysis

Categorical Versus Categorical: Tests

Filters

In a decision-making scenario, if it is $\textbf{ not }$ known which of the states of nature will occur but the probabilities of occurrence of the states are known the scenario is called decision-making under risk.

To compute the variance of a discrete distribution, it is $\textbf{ not }$ necessary to know the mean of the distribution.