SCENARIO 20-6
A student wanted to find out the optimal strategy to study for a Business Statistics exam.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.
-True or False: Referring to Scenario 20-6, the optimal strategy using the expected opportunity loss
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.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. 
-True or False: Referring to Scenario 20-6, the optimal strategy using the expected opportunity loss
criterion is to study 8 hours per week on average for the exam.

Quizplus · Accepted Answer

The expected opportunity loss criterion involves calculating the potential losses for each strategy and choosing the one with the smallest expected loss. Without specific data from Scenario 20-6, we cannot determine if studying 8 hours is optimal.

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