MC Qu. 9-73 Refer to the following payoff... Refer to the following payoff table: Alternative A1 A2 Prior Probability State of Nature S1 S2 -40 100 0.4 75 0 0.6 There is an option of paying $100 to have research done to better predict which state of nature will occur. When the true state of nature is S1, the research will accurately predict S1 60% of the time. When the true state of nature is S2, the research will accurately predict S2 80% of the time. Given that the research is done, what is the joint probability that the state of nature is S2 and the research predicts S2?

Practical Management Science
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ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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MC Qu. 9-73 Refer to the following payoff...
Refer to the following payoff table:
Alternative
A1
A2
Prior Probability
State of Nature
S1
S2
-40
100
0.4
75
0
0.6
There is an option of paying $100 to have research done to better predict which state of nature will occur. When the true state of nature is S1, the
research will accurately predict S1 60% of the time. When the true state of nature is S2, the research will accurately predict S2 80% of the time.
Given that the research is done, what is the joint probability that the state of nature is S2 and the research predicts S2?
Transcribed Image Text:MC Qu. 9-73 Refer to the following payoff... Refer to the following payoff table: Alternative A1 A2 Prior Probability State of Nature S1 S2 -40 100 0.4 75 0 0.6 There is an option of paying $100 to have research done to better predict which state of nature will occur. When the true state of nature is S1, the research will accurately predict S1 60% of the time. When the true state of nature is S2, the research will accurately predict S2 80% of the time. Given that the research is done, what is the joint probability that the state of nature is S2 and the research predicts S2?
Multiple Choice
O
O
O
0.08
0.16
0.24
0.32
0.36
Transcribed Image Text:Multiple Choice O O O 0.08 0.16 0.24 0.32 0.36
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