Exhibit 20-2 Below You Are Given a Payoff Table Involving Three States

question 14

Multiple Choice

Exhibit 20-2
Below you are given a payoff table involving three states of nature and two decision alternatives. The probability that S₁ will occur is 0.1; the probability that S₂ will occur is 0.6; and the probability that S₃ will occur is 0.3.
-Refer to Exhibit 20-2. The expected value of the best alternative equals

• A)29
• B)105
• C)12
• D)38.5

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