Which of the following statements is false regarding the expected monetary value (EMV)?
A)To calculate the EMV,the probabilities of the states of nature must be already decided upon.
B)We choose the decision with the largest EMV.
C)In general,the expected monetary values represent possible payoffs.
D)None of these choices.

Question

Quizplus · Accepted Answer

Expected Monetary Value (EMV) is a calculated average of possible outcomes, where each outcome is weighted by its probability of occurrence, not the possible payoffs themselves.

Which of the Following Statements Is False Regarding the Expected