What is the expected value of sample information

Assignment Help Finance Basics

Reference no: EM13294391

A group of physicians have been approach by the market research firm that offers to perform a study of the market at a fee of $5,000. The market researchers claim that their experience enebles them to use Baye's theorem to make the following statements of probability:

• Probability of a favorable market given a favorable study= 0.82
• Probability of an unfavorable market given a favorable study= 0.18
• Probability of a favorable market given an unfavorable study= 0.11
• Probability of an unfavorable market given an unfavorable study= 0.89
• Probability of a favorable research study = 0.55
• Probability of an unfavorable research study = 0.45
a) Develop a new decision tree for the medical professionals to reflect the options now open with the market study
b) Use the EMV approach to recommend a strategy
c) What is the expected value of sample information? How much might the physicians be willing to pay for a market study?

Reference no: EM13294391

Questions Cloud

Implement a circuit with 3 one bit inputs a-b and c : Implement a circuit with 3 one bit inputs A, B, and C and a singleone bit output Z. Z=1 when there are more inputs valued logic one than inputs valued logic zero. Z=0 otherwise. This circuit iscalled a majority one circuit.

What is the ships kinetic energy at this time : A large cruise ship of mass 6.80 107 kg has a speed of 12.8 m/s at some instant. what is the ship's kinetic energy at this time

Major developments occurring in the insurance company : Major developments occurring in the insurance company;

What is the charge per unit length lambda on the capacitor : When the capacitor is charged to 135V , what is the charge per unit length lambda on the capacitor

What is the expected value of sample information : What is the expected value of sample information? How much might the physicians be willing to pay for a market study?

Explain expanding against the surrounding atmosphere : If 1700 cal of heat is added to a system while the system does work equivalent to 3000 cal by expanding against the surrounding atmosphere, the value of E for the process is

What is the minimax regret decision : Today's electronics specializes in manufacturing modern electronic components. It also builds the equipment that produces the components. Phyllis Weinberger.

What is the surface-charge density on each plate : A parallel-plate air capacitor with a capacitance of 233 has a charge of magnitude 0.159muC on each plate. What is the surface-charge density on each plate

Determine the inductance of the coil that is formed : a student wraps 100 turns of wire on a pencil that is 7 mm in diameter. the pencil is a nonmagnetic core so has the same permeability as a vacum (4π x 0.00001 H/m). determine the inductance of the coil that is formed.

User Account

All Pages