The expected value of test information is:
A) zero if the new information does not change the firm's decisions.
B) the difference between the actual outcome with test information and without it.
C) the sum of the expected value with the information and without it.
D) the expected value of the decision taken using the test.
E) the same as the expected value of the decision taken without the test.

Question

Quizplus · Accepted Answer

The expected value of test information is zero if the new information does not change the firm's decisions because it means the information has not added any value to the decision-making process.

The Expected Value of Test Information Is