Exhibit 14.8 The Following Questions Use the Information Below

question 75

Multiple Choice

Exhibit 14.8
The following questions use the information below.
A company needs to buy a new insurance policy. They have three policies to choose from, A, B and C. The policies differ with respect to price, coverage and ease of billing. The company has developed the following AHP tables for price and summary. The other tables are not shown due to space limitations.
-Decision Analysis techniques provide modeling techniques to help decision makers make decisions. Which of the following is not typically a benefit of decision analysis?

• A) Incorporating uncertainty via probabilities.
• B) Incorporating risk via utility theory functions.
• C) Incorporating uncertainty via exponential distributions.
• D) Structuring decision strategies via decision trees.

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Definitions:

Construct

An abstract concept or idea that is chosen for study, usually representing phenomena that are not directly observable.

Variance

A statistical measure that indicates the spread of a dataset or the distribution of data points.

Dependent Variables

Variables in experimental research that are affected by manipulations of the independent variable, observed to understand the effects of the intervention.

Construct

An abstract concept that is specifically chosen or created for scientific inquiry to explain behaviors or phenomena.