BUS 461 WEEK 4 QUIZ III

BUS 461 WEEK 4 QUIZ III 
1	Question The fact that so many people enter sweepstakes and/or buy lottery tickets demonstrates the difference between:

 		 	  the expected value and the expected utility criteria.

 			  altruism and selfishness.

 			  risk aversion and risk indifference.

 			  certainty and uncertainty.



 	


Question 2.	Question :	The difference between “risk” and “uncertainty” in decision analysis alludes to the difference between:

	  knowledge and uncertainty.

 			  pessimism and optimism.

 		 	  known and unknown probabilities.

 			  aggression and conservatism.



 	


Question 3.	Question :	EVPI is the smallest expected regret of any decision alternative.
 	  True
 			  False

				

 	


Question 4.	Question :	If it is assumed that each possible state of nature has an equal likelihood of occurrence, the expected value criterion will yield the same result as:

	  maximin.

 			  minimax

 			  maximax

 		 	  the principle of insufficient reason.



 	

Question 5.	Question :	Theoretically, a payoff table is not limited to two dimensions.

 		  True
 		 	  False

				



Question 6.	Question :	If costs/losses, rather than profits/gains, are concerned, the minimax criterion is equivalent to:

 	 	  maximin.

 			  maximax.

 			  minimax regret.

 			  minimin.

 



 	


Question 7.	Question :	The expected value of perfect information (EVPI):

 		  is the same as the expected return with perfect information (ERPI).

 		 	  is never less than the expected value of sample information (EVSI).
 			  does not require probabilities in its calculation.

 			  requires the availability of sample information.



 	



Question 8.	Question :	The Expected Value of Perfect Information is always a value greater than 0.

 		  True
 		 	  False

				

 	


Question 9.	Question :	Utilities are generally well approximated by monetary payoffs for:

 		  risk-averse individuals.

 			  risk-preferring individuals.

 			  small businesses.

 		 	  large corporations.




Question 10.	Question :	The “principle of insufficient reason” indicates the decision maker- belief that any state of nature is as likely to occur as any other state.

 	  True
 			  False