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a.
Decide the optimal action based on the maximax criterion.
b.
Decide the optimal action based on the Maximin criterion.
c.
Find the expected monetary value for each action.
d.
Find the expected opportunity loss for each action.
e.
Explain the meaning of the
f.
Explain the reason for selecting either of the action from the results of parts (c) and (d).
g.
Find the coefficient of variation for each action.
h.
Find the return-to-risk ratio
i.
Explain the reason for selecting either of the action from the results of parts (g) and (h).
j.
Compare the results of parts (f) and (i) and explain any difference.
k.
Find the expected monetary value for each investment alternative when the probabilities of the different economic conditions are as given below.
0.1, 0.6 and 0.3
0.1, 0.3 and 0.6
0.4, 0.4 and 0.2
0.6, 0.3 and 0.1
Find the expected opportunity loss for each investment alternative when the probabilities of economic conditions are as given below.
0.1, 0.6 and 0.3
0.1, 0.3 and 0.6
0.4, 0.4 and 0.2
0.6, 0.3 and 0.1
Explain the meaning of the expected value of perfect information for this problem when the probabilities of each investment are as given below.
0.1,0.6 and 0.3
0.1,0.3 and 0.6
0.4,0.4 and 0.2
0.6,0.3 and 0.1
Explain the reason for selecting the investment from the results of parts (c) and (d) when the probabilities of each investment are as given below.
0.1, 0.6, and 0.3
0.1, 0.3, and 0.6
0.4, 0.4, and 0.2
0.6, 0.3, and 0.1
Find the coefficient of variation for each investment when the probabilities of different economic conditions are as given below.
0.1, 0.6, and 0.3
0.1, 0.3, and 0.6
0.4, 0.4, and 0.2
0.6, 0.3, and 0.1
Find the return-to-risk ratio
0.1, 0.6, and 0.3
0.1, 0.3, and 0.6
0.4, 0.4, and 0.2
0.6, 0.3, and 0.1
Explain the reason for selecting the investment from the results of coefficient of variation and RTRR when the probabilities of different economic conditions are:
0.1, 0.6, and 0.3
0.1, 0.3, and 0.6
0.4, 0.4, and 0.2
0.6, 0.3, and 0.1
Compare the results of parts (f) and (i) and explain the difference when the probabilities of different economic conditions are:
0.1, 0.6, and 0.3
0.1, 0.3, and 0.6
0.4, 0.4, and 0.2
0.6, 0.3, and 0.1
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Chapter 20 Solutions
Student Solutions Manual for Basic Business Statistics
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