Exhibit 20-5 Below You Are Given a Payoff Table Involving Three States

question 57

Multiple Choice

Exhibit 20-5
Below you are given a payoff table involving three states of nature and three decision alternatives. The probability of occurrence of S₁ is 0.2 and the probability of occurrence of S₂ is 0.3.
-Refer to Exhibit 20-5. The expected value of the best alternative is

• A)5.0
• B)6.5
• C)7.5
• D)9.0

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Definitions:

Two Factors

In experimental design, refers to experiments that investigate the effect of two independent variables on a dependent variable.

Total Sum

The aggregate or overall total of a series of numbers or quantities.

Squares

In mathematics, the result of multiplying a number by itself.

Factor A

Represents an independent variable or input in an experiment or study that is manipulated to observe its effect on a dependent variable.