Assume You Are Faced with the Following Decision Alternatives and Two

question 8

Short Answer

Assume you are faced with the following decision alternatives and two states of nature. The probability of the occurrence of state of nature 1 is 0.35. The payoff table is shown below:
a.Determine the expected value of each alternative and indicate which decision alternative is the best.
b.Determine the expected value with perfect information about the states of nature.
c.Determine the expected value of perfect information.

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