SCENARIO 19-5
the Following Payoff Table Shows Profits Associated with a Set

question 109

Short Answer

SCENARIO 19-5
The following payoff table shows profits associated with a set of 2 alternatives under 3 possible
events. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\text { Action }$
$\begin{array}{l}\begin{array} { c r r } \text { Event } &{ A } & { B } \\\hline 1 & 1000 & 1200 \\2 & 500 & 700 \\3 & 300 & - 200\end{array}\end{array}$ Suppose that the probability of Event 1 is 0.2, Event 2 is 0.5, and Event 3 is 0.3.
-Referring to Scenario 19-5, what is the optimal action using the return to risk ratio?

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Definitions:

Adolescence

The transitional stage of physical and psychological development that occurs between childhood and adulthood, characterized by rapid physical growth and psychological changes.

Generativity

In Erikson's theory of psychosocial development, a stage where adults seek to contribute to society and support future generations.

Ego Integrity

A sense of completeness and fulfillment in life reached in old age, according to Erik Erikson's theory of psychosocial development.

Middle-Aged

A life stage typically between the ages of 40 and 65, characterized by transitions in physical, psychological, and social domains.