Using the Table below, which is the recommended decision alternative using the optimistic approach? ? $$\begin{array}{l}
\text { Payoff Table }\
\begin{array} { | c | c | c | }
\hline \text { Decision Alternative } & \text { State of Nature 1 } & \text { State of Nature 2 } \
\hline \text { D1 } & 5 & 7 \
\hline \text { D2 } & - 4 & 1 \
\hline \text { D3 } & 1 & - 3 \
\hline \text { D4 } & 10 & 2 \
\hline \text { D5 } & 6 & 4 \
\hline
\end{array}
\end{array}$$
A)D1
B)D4
C)D2
D)D5

Question

Using the Table below, which is the recommended decision alternative using the optimistic approach? ? $$\begin{array}{l}
\text { Payoff Table }\
\begin{array} { | c | c | c | } 
\hline \text { Decision Alternative } & \text { State of Nature 1 } & \text { State of Nature 2 } \
\hline \text { D1 } & 5 & 7 \
\hline \text { D2 } & - 4 & 1 \
\hline \text { D3 } & 1 & - 3 \
\hline \text { D4 } & 10 & 2 \
\hline \text { D5 } & 6 & 4 \
\hline
\end{array}
\end{array}$$
A)D1
B)D4
C)D2
D)D5

Quizplus · Accepted Answer

The optimistic approach involves choosing the decision alternative with the highest maximum payoff. In this case, D4 has the highest maximum payoff of 10, so it is the recommended decision alternative using the optimistic approach.

Using the Table Below, Which Is the Recommended Decision Alternative