Question 1

TABLE 19-2
The following payoff matrix is given in dollars.   Suppose the probability of Event 1 is 0.5 and Event 2 is 0.5.
-Referring to Table 19-2,the EMV for Action A is

Accepted Answer

A) $300. 
B) $550. 
C) $600. 
D) $700. 
A) $300. 
B) $550. 
C) $600. 
D) $700.

Question 2

TABLE 19-1
The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature    
-Blossom's Flowers purchases roses for sale for Valentine's Day.The roses are purchased for $10 a dozen and are sold for $20 a dozen.Any roses not sold on Valentine's Day can be sold for $5 per dozen.The owner will purchase 1 of 3 amounts of roses for Valentine's Day: 100,200,or 400 dozen roses.Given 0.2,0.4,and 0.6 are the probabilities for the sale of 100,200,or 400 dozen roses,respectively,then the optimal EMV for buying roses is

Accepted Answer

A) $700. 
B) $900. 
C) $1,700. 
D) $1,900. 
A) $700. 
B) $900. 
C) $1,700. 
D) $1,900.

Question 3

TABLE 19-6
A student wanted to find out the optimal strategy to study for a Business Statistics exam.He constructed the following payoff table based on the mean amount of time he needed to study every week for the course and the degree of difficulty of the exam.From the information that he gathered from students who had taken the course,he concluded that there was a 40% probability that the exam would be easy.  
-Referring to Table 19-6,what would be the expected profit if the student had perfect information on whether the exam will be easy or difficult?

Accepted Answer

The answer of TABLE 19-6
A student wanted to find out...

Question 4

Look at the utility function graphed below and select the type of decision maker that corresponds to the graph.

Accepted Answer

A) Risk averter 
B) Risk neutral 
C) Risk taker 
D) Risk player 
A) Risk averter 
B) Risk neutral 
C) Risk taker 
D) Risk player

Question 5

TABLE 19-5
The following payoff table shows profits associated with a set of 2 alternatives under 3 possible events.   Suppose that the probability of Event 1 is 0.2,Event 2 is 0.5,and Event 3 is 0.3.
-Referring to Table 19-5,what is the optimal action using the coefficient of variation?

Accepted Answer

The answer of TABLE 19-5
The following payoff table shows profits...

Question 6

TABLE 19-1
The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature    
-Referring to Table 19-1,if the probability of S1 is 0.5,then the expected opportunity loss (EOL)for A1 is

Accepted Answer

A) 3. 
B) 4.5. 
C) 7. 
D) 8. 
A) 3. 
B) 4.5. 
C) 7. 
D) 8.

Question 7

In a local cellular phone area,company A accounts for 60% of the cellular phone market,while company B accounts for the remaining 40% of the market.Of the cellular calls made with company A,1% of the calls will have some sort of interference,while 2% of the cellular calls with company B will have interference.If a cellular call is selected at random,the probability that it will not have interference is

Accepted Answer

A) 0.014. 
B) 0.028. 
C) 0.14. 
D) 0.986. 
A) 0.014. 
B) 0.028. 
C) 0.14. 
D) 0.986.

Question 8

TABLE 19-6
A student wanted to find out the optimal strategy to study for a Business Statistics exam.He constructed the following payoff table based on the mean amount of time he needed to study every week for the course and the degree of difficulty of the exam.From the information that he gathered from students who had taken the course,he concluded that there was a 40% probability that the exam would be easy.  
-True or False: Referring to Table 19-6,the optimal strategy using the coefficient of variation criterion is to study 8 hours per week on average for the exam.

Accepted Answer

A) True 
 B)False

Question 9

TABLE 19-6
A student wanted to find out the optimal strategy to study for a Business Statistics exam.He constructed the following payoff table based on the mean amount of time he needed to study every week for the course and the degree of difficulty of the exam.From the information that he gathered from students who had taken the course,he concluded that there was a 40% probability that the exam would be easy.  
-True or False: Referring to Table 19-6,the optimal strategy using the maximin criterion is to study 16 hours per week on average for the exam.

Accepted Answer

A) True 
 B)False

Question 10

TABLE 19-4
A stock portfolio has the following returns under the market conditions listed below.  
-Referring to Table 19-4,what is the standard deviation?

Accepted Answer

A) 4,890 
B) 4,840 
C) 124.9 
D) 69.6 
A) 4,890 
B) 4,840 
C) 124.9 
D) 69.6

Question 11

TABLE 19-1
The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature    
-Referring to Table 19-1,if the probability of S1 is 0.5,then the expected opportunity loss (EOL)for A3 is

Accepted Answer

A) 3. 
B) 4.5. 
C) 7. 
D) 8. 
A) 3. 
B) 4.5. 
C) 7. 
D) 8.

Question 12

TABLE 19-1
The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature    
-Referring to Table 19-1,if the probability of S1 is 0.5,then the expected profit under certainty (EPUC )is

Accepted Answer

A) 3. 
B) 5. 
C) 8. 
D) 11. 
A) 3. 
B) 5. 
C) 8. 
D) 11.

Question 13

TABLE 19-1
The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature    
-Referring to Table 19-1,if the probability of S1 is 0.5,then the expected monetary value (EMV)for A2 is

Accepted Answer

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

Question 14

The difference between expected payoff under certainty and expected value of the best act without certainty is the

Accepted Answer

A) expected monetary value. 
B) expected net present value. 
C) expected value of perfect information. 
D) expected rate of return. 
A) expected monetary value. 
B) expected net present value. 
C) expected value of perfect information. 
D) expected rate of return.

Question 15

In portfolio analysis,the ________ is the reciprocal of the return to risk ratio.

Accepted Answer

coefficien

Question 16

TABLE 19-6
A student wanted to find out the optimal strategy to study for a Business Statistics exam.He constructed the following payoff table based on the mean amount of time he needed to study every week for the course and the degree of difficulty of the exam.From the information that he gathered from students who had taken the course,he concluded that there was a 40% probability that the exam would be easy.  
-True or False: Referring to Table 19-6,the optimal strategy using the maximax criterion is to study 8 hours per week on average for the exam.

Accepted Answer

A) True 
 B)False

Question 17

TABLE 19-1
The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature    
-Referring to Table 19-1,if the probability of S1 is 0.5,what is the optimal alternative using EMV?

Accepted Answer

A) A1 
B) A2 
C) A3 
D) It cannot be determined. 
A) A1 
B) A2 
C) A3 
D) It cannot be determined.

Question 18

TABLE 19-1
The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature    
-Referring to Table 19-1,if the probability of S1 is 0.5,then the return to risk ratio for A1 is

Accepted Answer

A) 0.667. 
B) 1.5. 
C) 2. 
D) 4.333. 
A) 0.667. 
B) 1.5. 
C) 2. 
D) 4.333.

Question 19

TABLE 19-3
The following information is from 2 investment opportunities.  
-Referring to Table 19-3,which investment has the optimal return to risk ratio?

Accepted Answer

A) Investment A 
B) Investment B 
C) The investments are equal. 
D) It cannot be determined. 
A) Investment A 
B) Investment B 
C) The investments are equal. 
D) It cannot be determined.

Question 20

TABLE 19-3
The following information is from 2 investment opportunities.  
-Referring to Table 19-3,what is the coefficient of variation for investment A?

Accepted Answer

A) 90.0% 
B) 11.1% 
C) 8.3% 
D) 5.0% 
A) 90.0% 
B) 11.1% 
C) 8.3% 
D) 5.0%

Exam 19: Decision Making

TABLE 19-2 The following payoff matrix is given in dollars. Suppose the probability of Event 1 is 0.5 and Event 2 is 0.5. -Referring to Table 19-2,the EMV for Action A is

Look at the utility function graphed below and select the type of decision maker that corresponds to the graph.

TABLE 19-5 The following payoff table shows profits associated with a set of 2 alternatives under 3 possible events. Suppose that the probability of Event 1 is 0.2,Event 2 is 0.5,and Event 3 is 0.3. -Referring to Table 19-5,what is the optimal action using the coefficient of variation?

TABLE 19-1 The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature -Referring to Table 19-1,if the probability of S1 is 0.5,then the expected opportunity loss (EOL)for A1 is

TABLE 19-4 A stock portfolio has the following returns under the market conditions listed below. -Referring to Table 19-4,what is the standard deviation?

TABLE 19-1 The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature -Referring to Table 19-1,if the probability of S1 is 0.5,then the expected opportunity loss (EOL)for A3 is

TABLE 19-1 The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature -Referring to Table 19-1,if the probability of S1 is 0.5,then the expected profit under certainty (EPUC )is

TABLE 19-1 The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature -Referring to Table 19-1,if the probability of S1 is 0.5,then the expected monetary value (EMV)for A2 is

The difference between expected payoff under certainty and expected value of the best act without certainty is the

In portfolio analysis,the ________ is the reciprocal of the return to risk ratio.

TABLE 19-1 The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature -Referring to Table 19-1,if the probability of S1 is 0.5,what is the optimal alternative using EMV?

TABLE 19-1 The following payoff table shows profits associated with a set of 3 alternatives under 2 possible states of nature -Referring to Table 19-1,if the probability of S1 is 0.5,then the return to risk ratio for A1 is

TABLE 19-3 The following information is from 2 investment opportunities. -Referring to Table 19-3,which investment has the optimal return to risk ratio?

TABLE 19-3 The following information is from 2 investment opportunities. -Referring to Table 19-3,what is the coefficient of variation for investment A?

Defining and Collecting Data

Numerical Descriptive Measures

Basic Probability

Discrete Probability Distributions

The Normal Distribution and Other Continuous Distributions

Sampling Distributions

Confidence Interval Estimation

Fundamentals of Hypothesis Testing: One-Sample Tests

Two-Sample Tests

Analysis of Variance

Chi-Square Tests and Nonparametric Tests

Simple Linear Regression

Introduction to Multiple Regression

Multiple Regression Model Building

Time-Series Forecasting

A Roadmap for Analyzing Data

Statistical Applications in Quality Management

Index Numbers

Chi-Square Tests for the Variance or Standard Deviation

Mcnemar Test for the Difference Between Two Proportions Related Samples

The Analysis of Means Anom

The Analysis of Proportions Anop

The Randomized Block Design

The Power of a Test

Estimation and Sample Size Determination for Finite Populations

Application of Confidence Interval Estimation in Auditing

Sampling From Finite Populations

The Normal Approximation to the Binomial Distribution

Counting Rules

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