Question 1

Bayes' Rule is useful for?

Accepted Answer

A)  Value of Sample Information 
B)  Value of Perfect Information 
C)  Sensitivity Analysis 
D)  All of these options 
E)  None of these options 
A)  Value of Sample Information 
B)  Value of Perfect Information 
C)  Sensitivity Analysis 
D)  All of these options 
E)  None of these options A

Question 2

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

Accepted Answer

A) True 
 B)False  True

Question 3

A risk profile lists:

Accepted Answer

A)  all possible monetary values and their corresponding probabilities 
B)  all possible outcomes and their corresponding utility 
C)  all options and their possible outcomes 
D)  the nodes and branches for each possible outcome 
E)  None of these options 
A)  all possible monetary values and their corresponding probabilities 
B)  all possible outcomes and their corresponding utility 
C)  all options and their possible outcomes 
D)  the nodes and branches for each possible outcome 
E)  None of these options A

Question 4

In decision trees,probabilities are listed on probability branches.These probabilities may be 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

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 6

Tornado charts and spider charts can be used to determine which input variables have the most impact on the expected value in a decision problem

Accepted Answer

A) True 
 B)False

Question 7

Which of the following can be obtained with a tornado chart?

Accepted Answer

A)  The absolute change in expected value resulting from the change in each input variable 
B)  The percent change in expected value resulting from the change in each input variable 
C)  A ranking of the relative sensitivity of expected value to each input variable 
D)  None of these options 
E)  All of these options 
A)  The absolute change in expected value resulting from the change in each input variable 
B)  The percent change in expected value resulting from the change in each input variable 
C)  A ranking of the relative sensitivity of expected value to each input variable 
D)  None of these options 
E)  All of these options

Question 8

In decision trees,time:

Accepted Answer

A)  is constant 
B)  proceeds from bottom to top 
C)  proceeds from top to bottom 
D)  proceeds from right to left 
E)  proceeds from left to right 
A)  is constant 
B)  proceeds from bottom to top 
C)  proceeds from top to bottom 
D)  proceeds from right to left 
E)  proceeds from left to right

Question 9

Bayes' is useful in determining the value of perfect information (EVPI).

Accepted Answer

A) True 
 B)False

Question 10

For a risk averse decision maker,the certainty equivalent is less than the expected monetary value (EMV).

Accepted Answer

A) True 
 B)False

Question 11

The expected value of sample information (EVSI)is the difference between the EMV we can obtain with sample information and the EMV we can obtain without information.

Accepted Answer

A) True 
 B)False

Question 12

A risk profile lists all possible monetary values and their corresponding probabilities.

Accepted Answer

A) True 
 B)False

Question 13

In decision trees,an end node (a triangle)indicates that the problem is completed;that is,all decisions have been made,all uncertainty has been resolved,and all payoffs/costs have been incurred.

Accepted Answer

A) True 
 B)False

Question 14

The sensitivity of the expected value to changes in the input variables can be inferred from a spider chart by observing:

Accepted Answer

A)  The height of the line above the horizontal axis for each variable 
B)  The length of the line for each variable 
C)  The slope of the line for each variable 
D)  The color of the line for each variable 
E)  None of these options 
A)  The height of the line above the horizontal axis for each variable 
B)  The length of the line for each variable 
C)  The slope of the line for each variable 
D)  The color of the line for each variable 
E)  None of these options

Question 15

If all monetary values in a decision problem are costs,then it is customary to list them as __________ values in a cost table.

Accepted Answer

A)  positive 
B)  negative 
C)  either positive or negative 
D)  All of these options 
A)  positive 
B)  negative 
C)  either positive or negative 
D)  All of these options

Question 16

Decision trees are composed of nodes (circles,squares,and triangles)and branches (lines).

Accepted Answer

A) True 
 B)False

Question 17

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 18

The expected value of perfect information (EVPI)is the most the decision maker would be willing to pay for the sample information.

Accepted Answer

A) True 
 B)False

Question 19

The certainty equivalent is the certain dollar amount a risk-averse decision maker would accept in order to avoid a gamble altogether.

Accepted Answer

A) True 
 B)False

Question 20

A strategy region chart is useful for seeing whether the decision changes over the range of the input variable.

Accepted Answer

A) True 
 B)False

Bayes' Rule is useful for?

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

A risk profile lists:

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

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

Tornado charts and spider charts can be used to determine which input variables have the most impact on the expected value in a decision problem

Which of the following can be obtained with a tornado chart?

In decision trees,time:

Bayes' is useful in determining the value of perfect information (EVPI).

For a risk averse decision maker,the certainty equivalent is less than the expected monetary value (EMV).

The expected value of sample information (EVSI)is the difference between the EMV we can obtain with sample information and the EMV we can obtain without information.

A risk profile lists all possible monetary values and their corresponding probabilities.

In decision trees,an end node (a triangle)indicates that the problem is completed;that is,all decisions have been made,all uncertainty has been resolved,and all payoffs/costs have been incurred.

The sensitivity of the expected value to changes in the input variables can be inferred from a spider chart by observing:

If all monetary values in a decision problem are costs,then it is customary to list them as __________ values in a cost table.

Decision trees are composed of nodes (circles,squares,and triangles)and branches (lines).

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

The expected value of perfect information (EVPI)is the most the decision maker would be willing to pay for the sample information.

The certainty equivalent is the certain dollar amount a risk-averse decision maker would accept in order to avoid a gamble altogether.

A strategy region chart is useful for seeing whether the decision changes over the range of the input variable.

Introduction to Data Analysis and Decision Making

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

Bayes' Rule is useful for?

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

A risk profile lists:

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

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

Tornado charts and spider charts can be used to determine which input variables have the most impact on the expected value in a decision problem

Which of the following can be obtained with a tornado chart?

In decision trees,time:

Bayes' is useful in determining the value of perfect information (EVPI).

For a risk averse decision maker,the certainty equivalent is less than the expected monetary value (EMV).

The expected value of sample information (EVSI)is the difference between the EMV we can obtain with sample information and the EMV we can obtain without information.

A risk profile lists all possible monetary values and their corresponding probabilities.

In decision trees,an end node (a triangle)indicates that the problem is completed;that is,all decisions have been made,all uncertainty has been resolved,and all payoffs/costs have been incurred.

The sensitivity of the expected value to changes in the input variables can be inferred from a spider chart by observing:

If all monetary values in a decision problem are costs,then it is customary to list them as __________ values in a cost table.

Decision trees are composed of nodes (circles,squares,and triangles)and branches (lines).

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

The expected value of perfect information (EVPI)is the most the decision maker would be willing to pay for the sample information.

The certainty equivalent is the certain dollar amount a risk-averse decision maker would accept in order to avoid a gamble altogether.

A strategy region chart is useful for seeing whether the decision changes over the range of the input variable.

Introduction to Data Analysis and Decision Making

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 ___.