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On the other hand only 130 of the 1300 insured

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Unformatted text preview: CSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 1 Topic: Decision Theory 47. A corn farmer has categorized the weather into three possible levels. The weather conditions will affect the timing of the harvest and the associated payoff. In this situation, the weather conditions is called the ____________________________. A. Alternatives B. States of nature C. Payoffs D. Perfect information AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 1 Topic: Decision Theory 1-1928 Chapter 01 - An Introduction to Business Statistics 48. Decision-makers in business organizations make most decisions in environments that involve some degree of ___________________. A. Risk B. Utility C. Certainty D. Uncertainty AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 1 Topic: Decision Theory 49. When making a decision in an environment of ________________, the decision maker knows which of the states of nature will actually occur. A. Risk B. Utility C. Certainty D. Uncertainty AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 1 Topic: Decision Theory 50. A tire manufacturer needs to make a decision about the amount of production for the coming month (high vs. low). The level of production largely depends on the level of demand. For this situation, the amount of production constitutes the ___________________ actions. A. Alternative B. Utility C. Certainty D. Uncertainty AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 1 Topic: Decision Theory 1-1929 Chapter 01 - An Introduction to Business Statistics 51. _______________________ is a diagram that assists the decision maker in analyzing a decision problem. A. Bayes Theorem B. Decision tree C. Utility curve D. Maximax AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 1 Topic: Decision Theory 52. In the application of Bayes' theorem the sample information is combined with prior probabilities to obtain ___________________ probabilities. A. Utility B. Maximax C. Posterior D. Pre-posterior AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 2 Topic: Posterior Analysis 53. The expected value criterion is used for decision-making under _______________. A. Risk B. Utility C. Certainty D. Uncertainty AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 1 Topic: Decision Theory 1-1930 Chapter 01 - An Introduction to Business Statistics 54. The _______________________ is the difference between the expected payoff that would have been realized had the best alternative action been selected if we know which state of nature has occurred and the expected payoff under risk. A. expected monetary value B. expected value of perfect information C. expected value of sample information D. expected net gain of sampling AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 1 Topic: Decision Theory 55. The _____________________ is the difference between the expected value of sampling and the cost of sampling. A. expected monetary value B. expected value of perfect information C. expected value of sample information D. expected net gain of sampling AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 Topic: Posterior Analysis 56. The __________________ criterion is preferred by optimistic decision-makers. A. Maximax B. Maximin C. Utility theory D. Risk theory AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 1 Topic: Decision Theory 1-1931 Chapter 01 - An Introduction to Business Statistics 57. The __________________ criterion is preferred by pessimistic decision- makers. A. Maximax B. Maximin C. Utility theory D. Risk theory AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 1 Topic: Decision Theory 58. A decision-maker's expected _____________ is based upon his/her attitude towards risk. A. Maximax B. Maximin C. Utility D. Risk theory AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 3 Topic: Utility Theory 59. In a decision-making situation, the maximum amount of money that should be spent to obtain perfect information is called the ______________________________. A. expected monetary value B. expected value of perfect information C. expected value of sample information D. expected net gain of sampling AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Easy Learning Objective: 1 Topic: Decision Theory 1-1932 Chapter 01 - An Introduction to Business Statistics 60. When we assess the worth of sample information in a decision-making problem, we are performing a(n) _____________ analysis. A. Utility B. Maximax C. Posterior D. Pre-posterior AACSB: Reflective Thinking Bloom's: Knowledge Difficulty: Medium Learning Objective: 2 Topic: Posterior Analysis 61. The expected net gain of sampling equals the ____________________ minus the cost of sampling. A. expected monetary value B. expected value of perfect information...
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