You are given two states of nature $S 1$ and $S 2$ and two courses of action $A 1$ and $A 2$ with a profit payoff table.

-Using the table above, answer the following: If the probabilities of $S 1$ and $S 2$ are, respectively, $\frac{4}{5}$ and $\frac{1}{5}$, the expected profit if $A 1$ is selected is
A) 36 .
B) 34 .
C) 18 .
D) 26 .

Question

You are given two states of nature $S 1$ and $S 2$ and two courses of action $A 1$ and $A 2$ with a profit payoff table.
 
-Using the table above, answer the following: If the probabilities of $S 1$ and $S 2$ are, respectively, $\frac{4}{5}$ and $\frac{1}{5}$, the expected profit if $A 1$ is selected is
A) 36 . 
B) 34 . 
C) 18 . 
D) 26 .

Quizplus · Accepted Answer

The expected profit is calculated by multiplying each outcome by its probability and summing the results: $ (40 \times \frac{4}{5}) + (10 \times \frac{1}{5}) = 32 + 2 = 34 $.

You Are Given Two States of Nature S1S 1S1 And S2S 2S2

You Are Given Two States of Nature $S 1$ And $S 2$