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# 3 6 and 1 respectively the payoff values are in

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Unformatted text preview: d drivers under the age of 25 had been involved in at least one automobile accident. On the other hand, only 130 of the 1300 insured drivers 25 years or older had been involved in at least one automobile accident. What is the probability that an insured driver of any age will be involved in an accident? A. 35% B. 20.5% C. 65% D. 68.3% E. 79.5% AACSB: Analytic Skills Bloom's: Application Difficulty: Hard Learning Objective: 2 Topic: Posterior Analysis 1-1922 Chapter 01 - An Introduction to Business Statistics 36. A pharmaceutical company manufacturing pregnancy test kits wants to determine the probability of a woman not being pregnant when the test results indicate pregnancy. It is estimated that the probability of pregnancy among potential users of the kit is 10%. According to the company laboratory test results 1 out of 100 non-pregnant women tested pregnant (false positive). On the other hand, 1 out of 200 pregnant women tested non-pregnant (false negative). A woman has just used the pregnancy test kit manufactured by the company and the results showed pregnancy. What is the probability that she is not pregnant? A. 90% B. 0.9% C. 8.3% D. 91.7% E. 10.85% AACSB: Analytic Skills Bloom's: Application Difficulty: Hard Learning Objective: 2 Topic: Posterior Analysis 37. A pharmaceutical company manufacturing pregnancy test kits wants to determine the probability of a woman actually being pregnant when the test results indicate that she is not pregnant. It is estimated that the probability of pregnancy among potential users of the kit is 10%. According to the company laboratory test results 1 out of 100 non-pregnant women tested pregnant (false positive). On the other hand, 1 out of 200 pregnant women tested nonpregnant (false negative). A woman has just used the pregnancy test kit manufactured by the company and the results showed that she is not pregnant. What is the probability that she is pregnant? A. 1% B. 0.9% C. 0.05% D. 8.3% E. 0.056% AACSB: Analytic Skills Bloom's: Application Difficulty: Hard Learning Objective: 2 Topic: Posterior Analysis 1-1923 Chapter 01 - An Introduction to Business Statistics 38. The utility curve given below represents the preferences of a _________________ decision maker. A. Risk averse B. Risk neutral C. Risk seeking D. None of the above AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 3 Topic: Utility Theory 1-1924 Chapter 01 - An Introduction to Business Statistics 39. The utility curve given below represents the preferences of a _________________ decision maker. A. Risk averse B. Risk neutral C. Risk seeking D. None of the above AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 3 Topic: Utility Theory 1-1925 Chapter 01 - An Introduction to Business Statistics 40. The utility curve given below represents the preferences of a _________________ decision maker. A. Risk averse B. Risk neutral C. Risk seeking D. None of the above AACSB: Reflective Thinking Bloom's: Comprehension Difficulty: Medium Learning Objective: 3 Topic: Utility Theory 41. In utility analysis, a utility curve that shows a rapid increase in utility for initial amounts of money followed by a gradual leveling off for larger amount of money is appropriate for a risk _____ decision maker. A. Seeking B. Averse C. Neutral D. None of the above AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 3 Topic: Utility Theory 1-1926 Chapter 01 - An Introduction to Business Statistics 42. __________________ statistics is an area of statistics that uses Bayes' theorem to update prior belief about a probability or population parameter to a posterior belief. A. Bayesian B. Utility theory C. Pre-posterior analysis D. Risk theory AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 Topic: Posterior Analysis 43. The _____________ criterion finds the best possible payoff for each alternative and then chooses the alternative that yields the maximum payoff. A. Maximin B. Certainty C. Maximax D. Decision AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 1 Topic: Decision Theory 44. The _____________ criterion finds the best possible payoff for each alternative and then chooses the alternative that yields the maximum payoff. A. Maximin B. Certainty C. Maximax D. Decision AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 1 Topic: Decision Theory 1-1927 Chapter 01 - An Introduction to Business Statistics 45. The ____________________ criterion for choosing among alternative actions assumes that the state of nature with the worst payoff will be experienced. A. Maximin B. Certainty C. Maximax D. Decision AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 1 Topic: Decision Theory 46. The ____________________ criterion for choosing among alternative actions assumes that the state of nature with the best payoff will be experienced. A. Maximin B. Certainty C. Maximax D. Decision AA...
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