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    T4-6 & T4-7 Payoff Table

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    The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature.

    States A1 A2 A3
    1 12 -2 8
    2 4 10 5

    Where: S1 is state of nature 1 A1 is action alternative 1
    S2 is state of nature 2 A2 is action alternative 2
    A3 is action alternative 3

    T4-6 Referring to the table above, if the probability of S1 is 0.2 and S2 is 0.8, then the expected opportunity loss (EOL) fro A1 is

    A. 0
    B. 1.2
    C. 4.8
    D. 5.6

    T4-7 Referring to the table above, if the probability of S1 is 0.5, then the expected monetary value (EMV) for A1 is

    A. 3
    B. 4
    C. 6.5
    D. 8

    © BrainMass Inc. brainmass.com June 3, 2020, 7:12 pm ad1c9bdddf
    https://brainmass.com/statistics/probability/payoff-table-90114

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    This solution contains the calculation and answers to the multiple choice question, T4-6 is completed in an attached Word document.

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