Which of the following is true about the expected value of perfect information?
A)It is the amount you would pay for any sample study.
B)It is calculated as EMV minus EOL.
C)It is calculated as expected value with perfect information minus maximum EMV.
D)It is the amount charged for marketing research.
E)None of the above

Question

Quizplus · Accepted Answer

The expected value of perfect information is calculated as the difference between the expected value with perfect information and the maximum EMV. This is because if perfect information is available, the decision maker would always choose the option with the highest EMV, and the expected value with perfect information would be equal to the maximum EMV. Therefore, the expected value of perfect information represents the value of obtaining perfect information to make a decision.

Which of the Following Is True About the Expected Value