Exhibit 20-5
Below you are given a payoff table involving three states of nature and three decision alternatives. The probability of occurrence of S 1 is 0.2 and the probability of occurrence of S 2 is 0.3.
-Refer to Exhibit 20-5. The recommended decision alternative based on the expected value is
A)A
B)B
C)C
D)All of the answers are correct.

Question

Exhibit 20-5
Below you are given a payoff table involving three states of nature and three decision alternatives.  The probability of occurrence of S 1 is 0.2 and the probability of occurrence of S 2 is 0.3.
-Refer to Exhibit 20-5. The recommended decision alternative based on the expected value is
A)A 
B)B 
C)C 
D)All of the answers are correct.

Quizplus · Accepted Answer

The expected value of alternative A is the highest among all the alternatives.

Exhibit 20-5 Below You Are Given a Payoff Table Involving Three States