Question 1

The concept of utility can be helpful to apply decision analysis techniques to situations which do not lend themselves to expected monetary value analysis.

Accepted Answer

A) True 
 B)False

Question 2

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 3

Consider the following decision table with rewards in $ millions.   The opportunity loss for the combination "S2" and "d1" is ___.

Accepted Answer

A) 9 
B) 5 
C) 3 
D) 0 
E) -1 
A) 9 
B) 5 
C) 3 
D) 0 
E) -1

Question 4

Make decisions under certainty by constructing a decision table.

Accepted Answer

Decision alternatives are the options op

Question 5

A risk-taker decision maker will bail out of a risky scenario only if the compensation to bail out is more than the expected monetary payoff from the risky scenario.

Accepted Answer

A) True 
 B)False

Question 6

Ray Crofford is evaluating investment alternatives for the $100,000 which he inherited from his grandfather.His investment advisor has identified two alternatives and constructed the following tables which show (1)expected profits (in $10,000's)for various market conditions and their probabilities,and (2)the advisor's track record on predicting Bull and Bear markets:   If the advisor predicts a Bear market the EMV of the Stocks alternative,using revised probabilities,is ___.

Accepted Answer

A) $132,300 
B) -$73,900 
C) $127,600 
D) -$99,800 
E) $100,000 
A) $132,300 
B) -$73,900 
C) $127,600 
D) -$99,800 
E) $100,000

Question 7

Ray Crofford is evaluating investment alternatives to invest $100,000 which he inherited from his grandfather.His investment advisor has identified four alternatives and constructed the following payoff table which shows expected profits (in $10,000's)for various market conditions:   For the 'Stocks' and 'Bonds' choices,the indifference value of Hurwicz's alpha is ___.

Accepted Answer

A) 0.82 
B) 0.71 
C) 0.65 
D) 0.33 
E) 0.50 
A) 0.82 
B) 0.71 
C) 0.65 
D) 0.33 
E) 0.50

Question 8

Consider the following decision table with rewards in $ millions.   Using the maximax criterion,the appropriate choice would be ___.

Accepted Answer

A) d1 
B) d2 
C) d3 
D) d4 
E) d5 
A) d1 
B) d2 
C) d3 
D) d4 
E) d5

Question 9

Ray Crofford is evaluating investment alternatives to invest $100,000 which he inherited from his grandfather.His investment advisor has identified four alternatives and constructed the following payoff table which shows expected profits (in $10,000's)for various market conditions:   If Ray uses the maximax criterion,the appropriate choice would be ___.

Accepted Answer

A) T-Bills 
B) Stocks 
C) Bonds 
D) Mixture 
E) none 
A) T-Bills 
B) Stocks 
C) Bonds 
D) Mixture 
E) none

Question 10

Melissa Rossi,Product Manager at National Consumers,Inc.(NCI),is evaluating alternatives for introducing a new package for toothpaste.She has identified four alternative markets,and has constructed the following table which shows NCI's rewards (in $1,000,000's)for various levels of acceptance by the markets and their probabilities:   The EMV of introducing the new package in the "National" market is ___.

Accepted Answer

A) $50,000 
B) $70,000 
C) $90,000 
D) $260,000 
E) $300,000 
A) $50,000 
B) $70,000 
C) $90,000 
D) $260,000 
E) $300,000

Question 11

Ray Crofford is evaluating investment alternatives to invest $100,000 which he inherited from his grandfather.His investment advisor has identified four alternatives and constructed the following payoff table which shows expected profits (in $10,000's)for various market conditions:   For the combination of 'T-Bills' and 'Neutral',the opportunity loss is ___.

Accepted Answer

A) 0 
B) 5 
C) 7 
D) 8 
E) -10 
A) 0 
B) 5 
C) 7 
D) 8 
E) -10

Question 12

A risk-avoider decision maker will bail out of a risky scenario only if the compensation to bail out is more than the expected monetary payoff from the risky scenario.

Accepted Answer

A) True 
 B)False

Question 13

Ray Crofford is evaluating investment alternatives for the $100,000 which he inherited from his grandfather.His investment advisor has identified four alternatives and constructed the following table which shows expected profits (in $10,000's)for various market conditions and their probabilities:   The EMV of investing in Stocks is ___.

Accepted Answer

A) $30,000 
B) $63,000 
C) $78,000 
D) $81,000 
E) $100,000 
A) $30,000 
B) $63,000 
C) $78,000 
D) $81,000 
E) $100,000

Question 14

Consider the following decision table with rewards in $ millions.   Using the maximin criterion,the appropriate choice would be ___.

Accepted Answer

A) d1 
B) d2 
C) d3 
D) d4 
E) d5 
A) d1 
B) d2 
C) d3 
D) d4 
E) d5

Question 15

Consider the following decision table with rewards in $ millions.   Using the Hurwicz criterion with alpha = 0.2,the appropriate choice would be ___.

Accepted Answer

A) d1 
B) d2 
C) d3 
D) d4 
E) d5 
A) d1 
B) d2 
C) d3 
D) d4 
E) d5

Question 16

Melissa Rossi,Product Manager at National Consumers,Inc.(NCI),is evaluating alternatives for introducing a new package for toothpaste.She has identified four alternative markets,and has constructed the following table which shows NCI's rewards (in $1,000,000's)for various levels of acceptance by the markets and their probabilities:   If Melissa uses the EMV criterion,the appropriate choice would be: ___.

Accepted Answer

A) Northeast only 
B) Southeast only 
C) National 
D) None (don't introduce the new package) 
A) Northeast only 
B) Southeast only 
C) National 
D) None (don't introduce the new package)

Question 17

Ray Crofford is evaluating investment alternatives for the $100,000 which he inherited from his grandfather.His investment advisor has identified four alternatives and constructed the following table which shows expected profits (in $10,000's)for various market conditions and their probabilities:   The EMV of investing in Mixture is ___.

Accepted Answer

A) $30,000 
B) $63,000 
C) $78,000 
D) $81,000 
E) $100,000 
A) $30,000 
B) $63,000 
C) $78,000 
D) $81,000 
E) $100,000

Question 18

Make decisions under uncertainty using the maximax criterion,the maximin criterion,the Hurwicz criterion,and minimax regret.

Accepted Answer

Decisions are made under uncertainty whe

The concept of utility can be helpful to apply decision analysis techniques to situations which do not lend themselves to expected monetary value analysis.

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

Consider the following decision table with rewards in $ millions. The opportunity loss for the combination "S₂" and "d₁" is ___.

Make decisions under certainty by constructing a decision table.

A risk-taker decision maker will bail out of a risky scenario only if the compensation to bail out is more than the expected monetary payoff from the risky scenario.

Consider the following decision table with rewards in $ millions. Using the maximax criterion,the appropriate choice would be ___.

A risk-avoider decision maker will bail out of a risky scenario only if the compensation to bail out is more than the expected monetary payoff from the risky scenario.

Consider the following decision table with rewards in $ millions. Using the maximin criterion,the appropriate choice would be ___.

Consider the following decision table with rewards in $ millions. Using the Hurwicz criterion with alpha = 0.2,the appropriate choice would be ___.

Make decisions under uncertainty using the maximax criterion,the maximin criterion,the Hurwicz criterion,and minimax regret.

Introduction to Statistics

Charts and Graphs

Descriptive Statistics

Probability

Discrete Distributions

Continuous Distributions

Sampling and Sampling Distributions

Statistical Inference: Estimation for Single Populations

Statistical Inference: Hypothesis Testing for Single Populations

Statistical Inferences About Two Populations

Analysis of Variance and Design of Experiments

Simple Regression Analysis and Correlation

Multiple Regression Analysis

Building Multiple Regression Models

Time-Series Forecasting and Index Numbers

Analysis of Categorical Data

Nonparametric Statistics

Statistical Quality Control

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Exam 19: Decision Analysis

The concept of utility can be helpful to apply decision analysis techniques to situations which do not lend themselves to expected monetary value analysis.

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

Consider the following decision table with rewards in $ millions. The opportunity loss for the combination "S2" and "d1" is ___.

Make decisions under certainty by constructing a decision table.

A risk-taker decision maker will bail out of a risky scenario only if the compensation to bail out is more than the expected monetary payoff from the risky scenario.

Consider the following decision table with rewards in $ millions. Using the maximax criterion,the appropriate choice would be ___.

A risk-avoider decision maker will bail out of a risky scenario only if the compensation to bail out is more than the expected monetary payoff from the risky scenario.

Consider the following decision table with rewards in $ millions. Using the maximin criterion,the appropriate choice would be ___.

Consider the following decision table with rewards in $ millions. Using the Hurwicz criterion with alpha = 0.2,the appropriate choice would be ___.

Make decisions under uncertainty using the maximax criterion,the maximin criterion,the Hurwicz criterion,and minimax regret.

Introduction to Statistics

Charts and Graphs

Descriptive Statistics

Probability

Discrete Distributions

Continuous Distributions

Sampling and Sampling Distributions

Statistical Inference: Estimation for Single Populations

Statistical Inference: Hypothesis Testing for Single Populations

Statistical Inferences About Two Populations

Analysis of Variance and Design of Experiments

Simple Regression Analysis and Correlation

Multiple Regression Analysis

Building Multiple Regression Models

Time-Series Forecasting and Index Numbers

Analysis of Categorical Data

Nonparametric Statistics

Statistical Quality Control

Filters

Consider the following decision table with rewards in $ millions. The opportunity loss for the combination "S₂" and "d₁" is ___.