SCENARIO 20-6
A student wanted to find out the optimal strategy to study for a Business Statistics exam with scores out of 100 possible points.He constructed the following payoff table based on the mean amount of time he needed to study every week for the course and the degree of difficulty of the exam.From the information that he gathered from students who had taken the course,he concluded that there was a 40% probability that the exam would be easy.

-Referring to Scenario 20-6,the optimal strategy using the return-to-risk ratio criterion is to study 8 hours per week on average for the exam.

Question

SCENARIO 20-6
A student wanted to find out the optimal strategy to study for a Business Statistics exam with scores out of 100 possible points.He constructed the following payoff table based on the mean amount of time he needed to study every week for the course and the degree of difficulty of the exam.From the information that he gathered from students who had taken the course,he concluded that there was a 40% probability that the exam would be easy.
 
-Referring to Scenario 20-6,the optimal strategy using the return-to-risk ratio criterion is to study 8 hours per week on average for the exam.

Quizplus · Accepted Answer

By calculating the return-to-risk ratios for each strategy, the strategy of studying 8 hours per week on average provides the highest ratio and is therefore the optimal strategy according to this criterion.

SCENARIO 20-6 a Student Wanted to Find Out the Optimal Strategy to Strategy