BUS 461 WEEK 4 QUIZ II

BUS 461 WEEK 4 QUIZ II
1 Expected value in decision analysis is synonymous with most likely value
True
False
2. The expected regret criterion will always yield the same optimal decision as which other criterion? (Points : 1)
maximin
minimax
minimax regret
expected value
3. When using the maximax criterion, the optimal decision alternative may be determined by simple inspection of the payoff table. (Points : 1)
True
False
4. The difference between “risk” and “uncertainty” in decision analysis alludes to the difference between: (Points : 1)
knowledge and uncertainty.
pessimism and optimism.
known and unknown probabilities.
aggression and conservatism.
5. The Expected Value of Perfect Information is always a value greater than 0. (Points : 1)
True
False
6. The “principle of insufficient reason” indicates the decision maker- belief that any state of nature is as likely to occur as any other state. (Points : 1)
True
False
7. The indifference approach for assigning utility values asks the decision maker which of two alternatives is preferred: the payoff under consideration or a chance at the highest payoff with a risk of the lowest payoff. (Points : 1)
True
False
8. Utilities are generally well approximated by monetary payoffs for: (Points : 1)
risk-averse individuals.
risk-preferring individuals.
small businesses.
large corporations.
9. The expected value criterion ignores the decision maker- attitude toward risk. (Points : 1)
True
False
10. If costs/losses, rather than profits/gains, are concerned, the minimax criterion is equivalent to: (Points : 1)
maximin.
maximax.
minimax regret.
minimin.