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
E)optimism

Question

Quizplus · Accepted Answer

In a situation of certainty, there is no need for decision making as the outcome is already known. In a situation of uncertainty, the probability of each state of nature cannot be estimated as there is no information available. However, in a situation of risk, while the outcome is not certain, the likelihood of each state of nature can be estimated based on available data, past experiences, or probability theory. Thus, decisions can be made by analyzing the potential outcomes and associated risks.

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