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# Investment Payoff Table and Decision Criteria Quiz

Created by
@BelievableMagicRealism

### What is the expected value of Node C?

• ₱27,500,000
• ₱35,625,000 (correct)
• ₱15,000,000
• ₱11,250,000
• ### What decision was made based on the decision tree in the text?

• To maintain status quo (correct)
• To liquidate assets
• To diversify portfolios
• To increase investments
• ### When will a decision tree always yield the same decision and expected payoff?

• When comparing different criteria
• When facing multiple decisions
• When only one decision needs to be made (correct)
• When dealing with uncertain outcomes
• ### In the context of the text, what is computed for the nodes B, C, and D?

<p>Expected values</p> Signup and view all the answers

### What is the primary focus of a Decision Tree with Posterior Probabilities?

<p>Utilizing positive and negative reports</p> Signup and view all the answers

### Which criterion leads to selecting the highest solution among circle nodes in a decision tree?

<p>Expected value criterion</p> Signup and view all the answers

### What is the probability P(A) of rolling a number 1, 3, or 5 on a regular die?

<p>1/3</p> Signup and view all the answers

### What is the probability P(C) of rolling a number 6 on a regular die?

<p>1/6</p> Signup and view all the answers

### If a person purchases four raffle tickets, what is the expected value?

<p>-P41.60</p> Signup and view all the answers

### What is the expected return for Investment A which pays an 8% return with a failure rate of 5%?

<p>+₱2,600</p> Signup and view all the answers

### What type of investment is better based on the expected return: Investment A or Investment B?

<p>Investment A</p> Signup and view all the answers

### If a regular die is rolled, what is the probability P(B) of getting a number 2 or 4?

<p>1/3</p> Signup and view all the answers

### What is the formula for calculating the expected value of a discrete random variable?

<p>$E(x) = k(P)$</p> Signup and view all the answers

### How is the concept of expected value important in characterizing the probability distribution of a discrete random variable?

<p>It represents the theoretical average of the variable</p> Signup and view all the answers

### If a player stands to win an amount $k with probability$P, how is the player's expected value defined?

<p>$k/P$</p> Signup and view all the answers

### How is the payoff table used in decision-making based on maximin, maximax, and minimax regret criteria?

<p>To identify the worst payoff and select the best decision based on it (maximin)</p> Signup and view all the answers

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