Use the accompanying payoff table with event probabilities to answer parts (a) through (h). Question content area bottomPart 1a. Calculate the expected monetary value (EMV) for actions A and B. EMV(A)=$enter your response hereEMV(B)=$enter your response here(Type integers or decimals.)Part 2b. Calculate the expected opportunity loss (EOL) for actions A and B. EOL(A)=$enter your response hereEOL(B)=$enter your response here(Type integers or decimals.)Part 3c. Explain the meaning of the expected value of perfect information (EVPI) in this problem. Select the correct choice below and fill in the answer box to complete your choice.(Type an integer or a decimal.) A.The EVPI value of$enter your response hererepresents the maximum amount that you should be willing to pay for perfect information. B.The EVPI value of$enter your response hererepresents the minimum amount that you should be willing to pay for perfect information. C.The EVPI value of$enter your response hereis the difference between the maximum expected opportunity loss and the minimum expected opportunity loss. D.The EVPI value of$enter your response hereis the difference between the maximum expected monetary value and the minimum expected monetary value.Part 4d. Based on the results of (a) or (b), which action would you choose? A.ActionAis better because it has the higher expected monetary value and the lower expected opportunity loss. B.ActionAis better because it has the the lower expected monetary value and the lower expected opportunity loss. C.ActionBis better because it has the lower expected monetary value and the higher expected opportunity loss. D.ActionBis better because it has the higher expected monetary value and the higher expected opportunity loss.Part 5e. Calculate the coefficient of variation (CV) for each action. CVA=enter your response here%CVB=enter your response here%(Round to three decimal places as needed.)Part 6f. Calculate the return-to-risk ratio (RTRR) for each action. RTRR(A)=enter your response hereRTRR(B)=enter your response here(Round to three decimal places as needed.)Part 7g. Based on the results of (e) and (f), what action would you choose? A.ActionAis better because it has the lower return-to-risk ratio. B.ActionAis better because it has the higher return-to-risk ratio. C.ActionBis better because it has the lower return-to-risk ratio. D.ActionBis better because it has the higher return-to-risk ratio.Part 8h. Compare the results of (d) and (g) and explain any differences. Choose the correct answer below. A.The resultsare the same even thoughthe criteria used in (d) select for low average payoffs and high average losses while ignoring variation, and the criterion used in (g) selects for high average values and low variation. B.The resultsare the same even thoughthe criteria used in (d) select for low average payoffs and high average losses while ignoring variation, and the criterion used in (g) selects for high average values and high variation. C.The resultsare different becausethe criteria used in (d) select for high average payoffs and low average losses while ignoring variation, and the criterion used in (g) selects for high average values and high variation. D.The resultsare different becausethe criteria used in (d) select for high average payoffs and low average losses while ignoring variation, and the criterion used in (g) selects for high average values and low variation. Use the accompanying payoff table with event probabilities to answer parts (a) through (h).E Click the icon to view the payoff table with probabilities.a. Calculate the expected monetary value (EMV) for actionsand B.EMV(A) = SEMV(B) = $(Type integers or decimals.)b. Calculate the expected opportunity loss (EOL) for actions A and B.EOL(A) = SEOL(B) = S(Type integers or decimals.)c. Explain the meaning of the expected value of perfect information (EVPI) in this problem. Select the correct choice below and fill in the answer box to complete your choice.(Type an integer or a decimal.)O A. The EVPI value of $ represents the maximum amount that you should be willing to pay for perfect information.O B. The EVPI value of $ represents the minimum amount that you should be willing to pay for perfect information.O C. The EVPI value of $ is the difference between the maximum expected opportunity loss and the minimum expected opportunity loss.O D. The EVPI value of $ is the difference between the maximum expected monetary value and the minimum expected monetary value.d. Based on the results of (a) or (b), which action would you choose?O A. Action A is better because it has the higher expected monetary value and the lower expected opportunity loss.O B. Action A is better because it has the the lower expected monetary value and the lower expected opportunity loss.O C. Action B is better because it has the lower expected monetary value and the higher expected opportunity loss.O D. Action B is better because it has the higher expected monetary value and the higher expected opportunity loss. ActionEvent ProbabilityAB10.5501100.52101002.

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Answered: Use the accompanying payoff table with…

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

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Question content area bottom

Part 1

a. Calculate the expected monetary value (EMV) for actions A and B.

EMV(A)=$enter your response here

EMV(B)=$enter your response here

(Type integers or decimals.)

Part 2

b. Calculate the expected opportunity loss (EOL) for actions A and B.

EOL(A)=$enter your response here

EOL(B)=$enter your response here

(Type integers or decimals.)

Part 3

c. Explain the meaning of the expected value of perfect information (EVPI) in this problem. Select the correct choice below and fill in the answer box to complete your choice.

(Type an integer or a decimal.)

The EVPI value of

$enter your response here

represents the maximum amount that you should be willing to pay for perfect information.

The EVPI value of

$enter your response here

represents the minimum amount that you should be willing to pay for perfect information.

The EVPI value of

$enter your response here

is the difference between the maximum expected opportunity loss and the minimum expected opportunity loss.

The EVPI value of

$enter your response here

is the difference between the maximum expected monetary value and the minimum expected monetary value.

Part 4

d. Based on the results of (a) or (b), which action would you choose?

Action

is better because it has the higher expected monetary value and the lower expected opportunity loss.

Action

is better because it has the the lower expected monetary value and the lower expected opportunity loss.

Action

is better because it has the lower expected monetary value and the higher expected opportunity loss.

Action

is better because it has the higher expected monetary value and the higher expected opportunity loss.

Part 5

e. Calculate the coefficient of variation (CV) for each action.

CVA=enter your response here%

CVB=enter your response here%

(Round to three decimal places as needed.)

Part 6

f. Calculate the return-to-risk ratio (RTRR) for each action.

RTRR(A)=enter your response here

RTRR(B)=enter your response here

(Round to three decimal places as needed.)

Part 7

g. Based on the results of (e) and (f), what action would you choose?

Action

is better because it has the lower return-to-risk ratio.

Action

is better because it has the higher return-to-risk ratio.

Action

is better because it has the lower return-to-risk ratio.

Action

is better because it has the higher return-to-risk ratio.

Part 8

h. Compare the results of (d) and (g) and explain any differences. Choose the correct answer below.

The results

are the same even though

the criteria used in (d) select for low average payoffs and high average losses while ignoring variation, and the criterion used in (g) selects for high average values and low variation.

The results

are the same even though

the criteria used in (d) select for low average payoffs and high average losses while ignoring variation, and the criterion used in (g) selects for high average values and high variation.

The results

are different because

the criteria used in (d) select for high average payoffs and low average losses while ignoring variation, and the criterion used in (g) selects for high average values and high variation.

The results

are different because

the criteria used in (d) select for high average payoffs and low average losses while ignoring variation, and the criterion used in (g) selects for high average values and low variation.

Use the accompanying payoff table with event probabilities to answer parts (a) through (h).
E Click the icon to view the payoff table with probabilities.
a. Calculate the expected monetary value (EMV) for actions
and B.
EMV(A) = S
EMV(B) = $
(Type integers or decimals.)
b. Calculate the expected opportunity loss (EOL) for actions A and B.
EOL(A) = S
EOL(B) = S
(Type integers or decimals.)
c. Explain the meaning of the expected value of perfect information (EVPI) in this problem. Select the correct choice below and fill in the answer box to complete your choice.
(Type an integer or a decimal.)
O A. The EVPI value of $ represents the maximum amount that you should be willing to pay for perfect information.
O B. The EVPI value of $ represents the minimum amount that you should be willing to pay for perfect information.
O C. The EVPI value of $ is the difference between the maximum expected opportunity loss and the minimum expected opportunity loss.
O D. The EVPI value of $ is the difference between the maximum expected monetary value and the minimum expected monetary value.
d. Based on the results of (a) or (b), which action would you choose?
O A. Action A is better because it has the higher expected monetary value and the lower expected opportunity loss.
O B. Action A is better because it has the the lower expected monetary value and the lower expected opportunity loss.
O C. Action B is better because it has the lower expected monetary value and the higher expected opportunity loss.
O D. Action B is better because it has the higher expected monetary value and the higher expected opportunity loss.

Action
Event Probability
A
B
1
0.5
50
110
0.5
210
100
2.

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