Use the following to answer the question(s) below.
Sunny Side Condominiums recently purchased land outside of Toronto and is trying to decide the size complex it should build (large or small). The following payoff table (in thousands of dollars) considers three possible levels of demand.
-If there is a 45% chance that the demand level will be low, 30% that it will be medium and 25% chance that it will be high, the expected value (in thousands of dollars) associated with the best action is
A) $326.25.
B) $310.
C) $535.
D) $208.75.
E) $225.

Question

Use the following to answer the question(s) below.
Sunny Side Condominiums recently purchased land outside of Toronto and is trying to decide the size complex it should build (large or small). The following payoff table (in thousands of dollars) considers three possible levels of demand. 
-If there is a 45% chance that the demand level will be low, 30% that it will be medium and 25% chance that it will be high, the expected value (in thousands of dollars) associated with the best action is
A) $326.25. 
B) $310. 
C) $535. 
D) $208.75. 
E) $225.

Quizplus · Accepted Answer

The expected value is calculated by multiplying each outcome by its probability and summing these products. Without the specific outcomes and their associated values for each demand level, we can't calculate the exact expected value. However, the correct answer is provided as A) $326.25, indicating that with the given probabilities and the best action chosen for each scenario, the expected value of the outcome is $326.25 thousand.

Use the Following to Answer the Question(s) Below