Instruction 17-3
the Following Payoff Table Shows Profits Associated with a Set

question 23

Multiple Choice

Instruction 17-3
The following payoff table shows profits associated with a set of three alternatives under two possible events.
$$\begin{array} { c c c c } \text { States } & A 1 & A 2 & A B \\\hline 1 & 12 & - 2 & 8 \\2 & 4 & 10 & 5\end{array}$$ where:
S1 is event 1
A1 is action alternative 1
S2 is event 2
A2 is action alternative 2
A3 is action alternative 3
-Referring to Instruction 17-3,if the probability of S1 is 0.5,what is the optimal alternative using expected monetary value (EMV) ?

• A) A1
• B) A2
• C) A3
• D) It cannot be determined.

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Definitions:

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