SCENARIO 19-6
a Student Wanted to Find Out the Optimal

question 122

True/False

SCENARIO 19-6
A student wanted to find out the optimal strategy to study for a Business Statistics exam. He
constructed the following payoff table based on the mean amount of time he needed to study every
week for the course and the degree of difficulty of the exam. From the information that he gathered
from students who had taken the course, he concluded that there was a 40% probability that the exam
would be easy. $$\begin{array} { | l | l | l | l | } \hline & 16 \text { hours } & 8 \text { hours } & 4 \text { hours } \\\hline \text { Easy Exam } & 40 & 60 & 80 \\\hline \text { Difficult Exam } & 100 & 50 & 0 \\\hline\end{array}$$
-Referring to Scenario 19-6, the optimal strategy using the expected opportunity loss
criterion is to study 16 hours per week on average for the exam.

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Definitions:

Inventory Turnover

A ratio showing how many times a company's inventory is sold and replaced over a certain period of time; it measures the efficiency of inventory management.

Financial Information

Data relating to the financial status or operations of a business, including balance sheets, income statements, and cash flow statements.

Times Interest Earned

A financial ratio that measures a company's ability to service its debt by comparing operating income to interest expense.

Financial Information

Data pertaining to the financial status or performance of an individual, business, or other entity, including reports on assets, liabilities, income, and expenses.