Instruction 17-6
a Student Wanted to Find Out the Optimal

question 99

True/False

Instruction 17-6
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 put in every week studying 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 Instruction 17-6,the optimal strategy using the return-to-risk ratio (RTRR)criterion is to study 8 hours per week on average for the exam.

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Definitions:

Basket of Goods

A fixed set of consumer products and services valued on an annual basis to measure inflation in an economy or specific market.

Government Surveys

Data collection tools used by governments to collect information about populations, economic indicators, public opinions, or conditions within the country.

Consumer Price Index

A measure that examines the weighted average of prices of a basket of consumer goods and services, such as transportation, food, and medical care, used to monitor inflation.

Consumer Price Index

A benchmark that evaluates the mean change through time in the outlay by urban consumers for a chosen collection of consumer items and services.