Use this information to answer the following questions.
Consider the following payoff table that represents the profits earned for each alternative (A,B,and C)under the states of nature S1,S2,and S3.

-Refer to the payoff table.Using the expected monetary value (EMV)criterion,what is the highest attainable expected profit? Assume P(S1)= 0.5 and P(S2)= 0.25.
A)$101.25
B)$103.33
C)$108.33
D)$125
E)$145

Question

Use this information to answer the following questions.
Consider the following payoff table that represents the profits earned for each alternative (A,B,and C)under the states of nature S1,S2,and S3.
 
-Refer to the payoff table.Using the expected monetary value (EMV)criterion,what is the highest attainable expected profit? Assume P(S1)= 0.5 and P(S2)= 0.25.
A)$101.25 
B)$103.33 
C)$108.33 
D)$125 
E)$145

Quizplus · Accepted Answer

The expected monetary value (EMV) is calculated as the sum of the products of the payoffs and their probabilities. In this case, the EMV is:EMV = (0.5 * 100) + (0.25 * 125) = 101.25Therefore, the highest attainable expected profit is $101.25.

Use This Information to Answer the Following Questions