HW2_Soln - MS&E 252 Decision Analysis I Handout#8 Homework...

Info icon This preview shows pages 1–4. Sign up to view the full content.

View Full Document Right Arrow Icon
MS&E 252 Handout #8 Decision Analysis I 10/14/2007 Page 1 of 7 HW #2 Solutions Homework Assignment #2- Solutions 0 5 10 15 20 25 30 35 40 -INF-0 0-0.5 0.5-1 1-1.5 1.5-2 2-2.5 2.5-3 3-3.5 3.5-4 4-4.5 4.5-5 5-5.5 5.5-6 6-6.5 6.5-7 7-7.5 7.5-8 8-8.5 8.5-9 9-9.5 9.5-10 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 The grade distribution for this homework was fairly typical. However, very few people scored above 9/10, due to the last question about the Dow Jones Index on which very few students got more than 0.2/1. Grade Distribution by Question On the next page you will find a breakdown of how well students did on each question. For each question you will see a bar with three different marks on it: The left end of the bar (10%) corresponds to the number of points where only 10% of all students received a lower score. The right end of the bar (90%) corresponds to the number of points where only 10% of all students received a higher score. The mark in the middle of the bar (50%) corresponds to the median: the number of points such that half of the class did better than the mark and the other half did worse. That should allow you to understand the following chart. You will notice that almost everyone did very well on questions 1,3, 7, and 9. For some questions, such as questions 2 and 8, few people got the question wrong, but many of those who did lost a lot of points. This probably means that those people assigned very high probabilities on one of the wrong answers.
Image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
MS&E 252 Handout #8 Decision Analysis I 10/14/2007 Page 2 of 7 HW #2 Solutions Score on HW Question - - - - 0.0 0.5 1.0 Question 1 10% 50% 90% Question 2 10% 50% 90% Question 3 10% 50% 90% Question 4 10% 50% 90% Question 5 10% 50% 90% Question 6 10% 50% 90% Question 7 10% 50% 90% Question 8 10% 50% 90% Question 9 10% 50% 90% Question 10 10% 50% 90%
Image of page 2
MS&E 252 Handout #8 Decision Analysis I 10/14/2007 Page 3 of 7 HW #2 Solutions Distinctions These distinctions were prepared by the teaching team and reflect our best belief of the meanings of these terms. Decision Basis is the basis on which a decision is made. It includes three key elements: Alternatives are what you can do. You need more than one. Preferences are what you want. You must care about what might happen. Information is what you know or believe to be true. Information links what you want to what you can do. Sunk cost is a past irrevocable allocation of resources. You could also think of it as how you got into a particular situation. We only make decisions about the future, and normatively speaking, sunk costs are irrelevant to the evaluation of future decisions (ignoring taxation) and therefore should not be considered. From a descriptive perspective, decision-makers are often improperly influenced by sunk costs. E.g., “We’ve put $10M into this venture. We can’t abandon it now!” Personal Indifferent Buying Price (PIBP) is the most you would be willing to pay in return for something that you will use and not sell. The PIBP for good G for person P is a sum of money M at which P is indifferent between {paying M and getting G} and {keeping M and not getting G}, with the important caveat that P
Image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 4
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern