Multiple Choice
Refer to the following payoff table:
There is an option of paying $100 to have research done to better predict which state of nature will occur. When the true state of nature is S1, the research will accurately predict S1 60% of the time. When the true state of nature is S2, the research will accurately predict S2 80% of the time.
Given that the research is done, what is the expected payoff using Bayes' decision rule?
A) −82
B) −44
C) 0
D) 29
E) 40
Correct Answer:

Verified
Correct Answer:
Verified
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