The difference between expected payoff under certainty and expected value of the best act without certainty is the:
A)expected monetary value.
B)expected net present value.
C)expected value of perfect information.
D)expected rate of return.

Question

Quizplus · Accepted Answer

The difference between expected payoff under certainty and expected value of the best act without certainty is known as the value of perfect information. This concept helps in quantifying how much a decision maker would be willing to pay for additional information before making a decision. Therefore, the correct option is C, i.e., expected value of perfect information.

The Difference Between Expected Payoff Under Certainty and Expected Value