For a decision alternative, the weighted average of the payoffs is known as
A) the expected value of perfect information.
B) the expected value.
C) weighted probability.
D) perfect information.

Question

Quizplus · Accepted Answer

The weighted average of the payoffs is known as the expected value. This is the most commonly used criterion for decision making, as it takes into account the probability of each potential outcome and the value associated with each outcome. The expected value can help to determine the best course of action by choosing the alternative with the highest expected value.

For a Decision Alternative, the Weighted Average of the Payoffs