Which of the following assumptions apply when making decisions on the basis of expected values:
A)the decision must be a 'one-off'.
B)there must be many possible outcomes.
C)it is based on the assumption that the decision will be repeated many times.
D)none of the above.

Question

Quizplus · Accepted Answer

The assumption that decision making on the basis of expected values is based on is that the decision will be repeated many times. This allows for the calculation of an average outcome, which is the expected value. Option A is incorrect, as the assumption does not require the decision to be a 'one-off'. Option B is also incorrect, as while there must be multiple outcomes, the assumption does not require there to be many possible outcomes.

Which of the Following Assumptions Apply When Making Decisions on the Basis