In decision-making under risk, the expected monetary value without information is ____________.
A)the weighted average of the best payoff for each state of nature
B)the largest of the EMVs for the different decision alternatives
C)never smaller than the expected monetary payoff with perfect information
D)the average of the EMVs
E)half the expected monetary value with information

Question

Quizplus · Accepted Answer

The expected monetary value (EMV) without information is calculated as the largest of the EMVs for the different decision alternatives. This represents the best expected outcome from the available choices, assuming no additional information is obtained.

In Decision-Making Under Risk, the Expected Monetary Value Without Information