The difference between expected payoff under certainty and expected payoff under risk is the expected:
A)monetary value.
B)value of perfect information.
C)net present value.
D)rate of return.
E)profit.

Question

Quizplus · Accepted Answer

The difference between the expected payoff under certainty and the expected payoff under risk is known as the value of perfect information. This concept is used in decision-making processes to evaluate how much decision-makers would be willing to pay for information that would remove any uncertainty about which state of nature will occur.

The Difference Between Expected Payoff Under Certainty and Expected Payoff