The Expected Value of Perfect Information (EVPI) Is the

question 95

Multiple Choice

The expected value of perfect information (EVPI) is the

• A) payoff for a decision made under perfect information
• B) payoff under minimum risk
• C) average expected payoff
• D) difference between the payoff under perfect information and the payoff under risk
• E) none of the above

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Definitions:

Probability Of Failure

The probability that a system or component will not execute its designated purpose as expected.

Expected Value

A calculated average or mean of all possible outcomes of a random variable, considering the probabilities of each outcome.

Binomial Random Variable

A type of discrete random variable that arises in situations where an experiment or process is repeated a fixed number of times, with each trial having two possible outcomes (success or failure) and a constant probability of success.

Binomial Probability Distribution

A probability distribution that summarizes the likelihood that a variable will take one of two independent values under a given set of parameters or conditions.