What is the expected value for the best decision

Reference no: EM13825894

Question 1

A payoff table is given below and the probabilities of s1, s2, and s3 are .2, .5, and .3, respectively, then what is the most you pay for a highly reliable forecast?

s1 s2 s3

d1 250 750 500

d2 300 -250 1200

d3 500 500 600

Question 2

Expected value is the sum of the weighted payoff possibilities at a circular node in a decision tree.

Question 3

A payoff table is given as; what choice should be made by the conservative decision maker?

s1 s2 s3

d1 250 750 500

d2 300 -250 1200

d3 500 500 600

Question 4

For the payoff table below, the decision maker will use P(s1) = .15, P(s2) = .5, and P(s3) = .35.

What is the expected value for the best decision?

State of Nature

Decision s1 s2 s3

d1 -5,000 1,000 10,000

d2 -15,000 -2,000 40,000

Question 5

If the probability of s1 is .40 what is the value at node 11.

Question 6

Given the following table of payoffs use sensitivity analysis to determine at what probability or less you would select decision A?

Decision Event1 Event 2

A 0 20

B 6 16

C 8 0

Question 7

Given the following table of payoffs use sensitivity analysis to determine at what probability or more you would select decision C?

Decision Event1 Event 2

A 0 20

B 6 16

C 8 0

Question 8

If the probability of s1 = .6 and the probability of F = .40 what is the value at node 4.

Question 9

The following is a payoff table giving profits for various situations.

What decision would an optimist make?

Question 10

The following is a payoff table.

What decision should be made based on the minimax regret criterion?

Reference no: EM13825894

Questions Cloud

Capital investment project to satisfy suppliers of capital : What would be the minimum expected return from a new capital investment project to satisfy the suppliers of the capital? Assume the applicable tax rate is 40%, interest on debt is 7%, flotation cost per share of preferred stock is $0.75, and flotatio..

Cornerstone of auditing : Independence is the cornerstone of auditing. It has two facets - the fact of independence (also called actual independence) and the appearance of independence (also called perceived independence).

Company vision and values statement : The problem relates to Business Management and it discuss about the business communication and the effectiveness of various forms of business communication which include company memo, one section of a company report, an email, a public blog or oth..

Taxable bond yield-investor be indifferent between the bonds : Assume taxable bond yields 8.25 percent and a comparable municipal bond yields 6.85 percent. At what tax rate would an investor be indifferent between the bonds?

What is the expected value for the best decision : For the payoff table below, the decision maker will use P(s1) = .15, P(s2) = .5, and P(s3) = .35. What is the expected value for the best decision

Harvard case study ford motor company value enhancement plan : Case Study: Ford Motor Company's Value Enhancement Plan (A), Harvard Business School, 9-201-079.

Calculate the cost of the companys retained earnings : The corporate treasurer of Rollinsford Company expects the company to grow at 3% in the future, and debt securities at 4% interest (tax rate = 35%) to be a cheaper option to finance the growth. The current market price per share of its common stock i..

A report on patient assessment on 5 dimensions of health : Write a report on patient assessment on 5 dimensions of health

What will the percentage change in the price of this bond : A 15-year, 4 percent coupon bond with a face value of $1,000 pays interest semiannually. Assume the bond currently sells at par. What will the percentage change in the price of this bond be if market rates increase by 10 percent?

User Account

All Pages