A payoff table, the prior probabilities for two states of nature, and the likelihood probabilities are shown below.
Payoff Table:
Prior Probabilities:
P( ) = 0.4, P( ) = 0.6.
Likelihood Probabilities: a. Use the prior and likelihood probabilities to calculate the posterior probabilities for the experimental outcome .
b. Use the posterior probabilities from a. to recalculate the expected monetary value of each act, then determine the optimal act and the EMV*.
c. Use the prior and likelihood probabilities to calculate the posterior probabilities for the experimental outcome .
d. Use the posterior probabilities from c. to recalculate the expected monetary value of each act, then determine the optimal act and the .
e. Use your answers to parts a. to d. to calculate the expected monetary value with additional information.
f. Calculate the expected value of sample information.
Correct Answer:
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EMV´= (0.428)(32....
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