[SOLVED] One strategy that can be used in

One strategy that can be used in making decisions under risk is the ___________. a) Expected monetary value approach b) Maximax risk criterion c) Minmax risk strategy d) Minimax regret strategy e) Maximax regret strategy 26. In a capacity expansion decision there are two decision alternatives and the payoffs to each alternative depend on three states of nature, S1, S2 and S3. The probabilities associated with these states are 0.2, 0.7, and 0.1. One of the alternatives is to build a large facility for which the payoffs (in million $) under S1, S2, and S3 are -100, 250, and 750 respectively. The expected monetary value (in million $) for this alternative is ____________. a) 250 b) 270 c) 280 d) 170 e) 230 27. In a capacity expansion decision there are two decision alternatives and the payoffs to each alternative depend on three states of nature, S1, S2 and S3. The probabilities associated with these states are 0.2, 0.7, and 0.1. One of the alternatives is to build a small facility for which the payoffs (in million $) under S1, S2, and S3 are 100, 300, and 300 respectively. The expected monetary value (in million $) for this alternative is ____________. a) 250 b) 270 c) 260 d) 170 e) 230 28. In a capacity expansion decision there are two decision alternatives and the payoffs to each alternative depend on three states of nature, S1, S2 and S3. The probabilities associated with these states are 0.2, 0.7, and 0.1. One of the alternatives is to build a large facility for which the payoffs (in million $) under S1, S2, and S3 are -100, 250, and 750 respectively. The other alternative is to build a small facility for which the payoffs (in million $) under S1, S2, and S3 are 100, 300, and 300 respectively. The expected value of perfect information (in million $) for this decision setting is ____________. a) 25 b) 45 c) 26 d) 17 e) 80 29. Suppose a decision maker has earned the right to play a game in which a win results in a payoff of $1,000,000 and a loss would yield nothing. The decision maker has determined the probability of winning to be 0.20. If the decision maker will agree to give up his right to play the game for a cash payment of $100,000, the decision maker is ____. a) A risk-taker b) A risk-avoider c) An EMVer d) An optimist e) A pessimist 30. Suppose a decision maker has earned the right to play a game in which a win results in a payoff of $1,000,000 and a loss would yield nothing. The decision maker has determined the probability of winning to be 0.20. If the decision maker will agree to give up his right to play the game only if he is offered a payment of at least of $800,000, the decision maker is _______. a) A risk-taker b) A risk-avoider c) An EMVer d) An optimist e) A pessimist 31. When using a decision table, the selection of a decision alternative is influenced by which of the following factors? a) The probability of unknown future states occurring b) The decision makerâ€™s risk tolerance c) The payoff amounts of each investment d) Both a and c e) All of the above 32. Two candidates are running in the presidential election, a Republican candidate and a Democratic candidate. Current polling shows a 35% chance that the Republican candidate will be elected and a 65% chance that the Democratic candidate will be elected. An analyst who has a good track record of predicting the results of past presidential elections is asked to predict the winner. In the past, her predictions have been slightly more accurate when predicting success for the Republican Candidate. Her prediction accuracy record is described by the following table.

Given this information, what is the probability that the analyst will predict that the Republican candidate will win? a) 0.625 b) 0.48 c) 0.215 d) 0.325 33. Two candidates are running in the presidential election, a Republican candidate and a Democratic candidate. Current polling shows a 35% chance that the Republican candidate will be elected and a 65% chance that the Democratic candidate will be elected. An analyst who has a good track record of predicting the results of past presidential elections is asked to predict the winner. In the past, her predictions have been slightly more accurate when predicting success for the Republican Candidate. Her prediction accuracy record is described by the following table.

Given this information, what are the revised probabilities that the Republican Candidate and Democratic Candidate win, given that the analyst predicts that the Republican Candidate will win? a) 0.625 and 0.275 b) 0.375 and 0.475 c) 0.6533 and 0.375 d) 0.589 and 0.411

Question: One strategy that can be used in