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
T4-7 Referring to the table above, if the probability of S1 is 0.5, then the expected monetary value (EMV) for A1 is
This solution contains the calculation and answers to the multiple choice question, T4-6 is completed in an attached Word document.