making decisions under risk
A)maximizing expected value is always the best rule.
B)mean variance analysis is always the best rule.
C)the coefficient of variation rule is always best.
D)maximizing expected value is best for making repeated decisions with identical probabilities.
E)none of the above

Question

Quizplus · Accepted Answer

Maximizing expected value is the best rule for making repeated decisions with identical probabilities as it ensures the highest return over time. However, for decisions with varying probabilities, the mean variance analysis or coefficient of variation rule may be more appropriate.

Making Decisions Under Risk