Calculating expected value for decision

Assignment Help Basic Statistics
Reference no: EM1321984

Q1) Miramar Company is going to introduce one of 3 new products: a widget, a hummer, or a nimnot. Market conditions (favourable, stable, or unfavourable) will find out profit or loss the company realizes, as listed in following payoff table:

  

Market Conditions

 

Favorable

Stable

Unfavorable

Product

.2

.7

.1

Widget

$120,000

$70,000

$-30,000

Hummer

60,000

40,000

20,000

Nimnot

35,000

30,000

30,000

i) Calculate expected value for each decision and choose the best one.

ii) Find out how much firm would be eager to pay to a market research firm to gain better information about future market conditions

Q2) Test statistic for this hypothesis test must be:

a) t = 1.95

b) z = 1.95

c) t = 1.38

d) z = 1.38

Q3) Determine the critical value if alpha = 0.05?

a) z.05 = 1.645

b) z.05 = 1.960

c) t.05 = 6.314

d) t.05 = 12.706

Reference no: EM1321984

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