SCENARIO 19-2
The following payoff matrix is given in dollars. $\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\text { Action }$
$\begin{array}{l}
\begin{array} { c c c }
\text { Event } & A & B \
\hline 1 & 400 & 700 \
2 & 200 & 500
\end{array}
\end{array}$ Suppose the probability of Event 1 is 0.5 and Event 2 is 0.5.
-Referring to Scenario 19-2, the expected profit under certainty (EPUC ) is
A) 0
B) 300
C) 500
D) 600

Question

SCENARIO 19-2
The following payoff matrix is given in dollars. $\quad $$\quad $$\quad $$\quad $$\quad $$\quad $$\text { Action }$
$\begin{array}{l}
\begin{array} { c c c } 
\text { Event } & A & B \
\hline 1 & 400 & 700 \
2 & 200 & 500
\end{array}
\end{array}$ Suppose the probability of Event 1 is 0.5 and Event 2 is 0.5.
-Referring to Scenario 19-2, the expected profit under certainty (EPUC ) is
A) 0
B) 300
C) 500
D) 600

Quizplus · Accepted Answer

The expected profit under certainty is calculated by taking the maximum payoff for each event and then finding the expected value. For Event 1, the maximum payoff is 700, and for Event 2, it is 500. The EPUC is (0.5 * 700) + (0.5 * 500) = 600.

SCENARIO 19-2 the Following Payoff Matrix Is Given in Dollars \quad

SCENARIO 19-2
the Following Payoff Matrix Is Given in Dollars $\quad$