Exhibit 21-5 Below You Are Given a Payoff Table Involving Three States

question 9

Multiple Choice

Exhibit 21-5
Below you are given a payoff table involving three states of nature and three decision alternatives. The probability of occurrence of S₁ is 0.2 and the probability of occurrence of S₂ is 0.3.
-Refer to Exhibit 21-5. The expected monetary value of alternative C is

• A)30
• B)6.5
• C)5.7
• D)5.5

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Definitions:

Displacement

In psychology, displacement refers to the unconscious transfer of an intense emotion from its original object to another, more acceptable one.

Defense Mechanism

Psychological strategies employed unconsciously to protect a person from anxiety-arising thoughts or feelings.

Unacceptable Impulses

Thoughts or desires that are often viewed as inappropriate or socially unacceptable, which can cause distress if not managed.

Displacement

In psychology, a defense mechanism where mind substitutes a new aim or object for goals felt in their original form to be dangerous or unacceptable.