The expected monetary value criterion (EMV) is the decision-making approach used with the decision environment of:
A)certainty
B)risk
C)uncertainty
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

EMV is used in decision-making under risk, where the probabilities of possible outcomes are known. In this environment, decisions can be made based on the expected values of each possible outcome. In environments of certainty, the outcome and its associated monetary value is known for certain, making EMV unnecessary. In environments of uncertainty, there is not enough information available to calculate probabilities and expected values, so EMV is not applicable.

The Expected Monetary Value Criterion (EMV) Is the Decision-Making Approach