In a decision analysis problem, variables (such as investing in common stocks or corporate bonds)which are under the decision maker's control are called _________.
A)payoffs
B)decision alternatives
C)states of nature
D)revised probabilities
E)prior probabilities

Question

Quizplus · Accepted Answer

Decision alternatives are the variables under the decision maker's control, so the best choice would be option B - decision alternatives. Payoffs are the possible outcomes, states of nature are the uncertain events that could affect outcomes, revised probabilities are probabilities that are updated after new information is obtained, and prior probabilities are probabilities based on initial assumptions.

In a Decision Analysis Problem, Variables (Such as Investing in Common