When making a decision in an environment of ________________,the likelihood of each state of nature can be estimated.
A)Certainty
B)Uncertainty
C)Risk
D)Alternatives

Question

Quizplus · Accepted Answer

In an environment of risk, the likelihood of each state of nature can be estimated. This allows decision makers to assign probabilities to each possible outcome and make more informed decisions. In contrast, in an environment of certainty, there is only one possible outcome, while in an environment of uncertainty, the probabilities of each outcome cannot be estimated. Therefore, the best choice for decision making is in an environment of risk where the probabilities of each state of nature can be estimated.

When Making a Decision in an Environment of ________________,The Likelihood