TABLE 19-6
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.

-Referring to Table 19-6, the optimal strategy using the coefficient of variation criterion is to study 8 hours per week on average for the exam.

Question

TABLE 19-6
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.
 
-Referring to Table 19-6, the optimal strategy using the coefficient of variation criterion is to study 8 hours per week on average for the exam.

Quizplus · Accepted Answer

To find the optimal strategy using the coefficient of variation criterion, we need to calculate the coefficient of variation for each row in the table (by dividing the standard deviation by the mean) and choose the strategy with the lowest coefficient of variation. The strategy of studying 8 hours per week on average has the lowest coefficient of variation (0.16) compared to all other strategies, so it is the optimal strategy. Therefore, the statement is true.

TABLE 19-6 a Student Wanted to Find Out the Optimal Strategy to Strategy