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1. Utility values typically range from -1 to 1 1 to 10 0 to 1 1 to 100 None of t

ID: 2900659 • Letter: 1

Question

1. Utility values typically range from



-1 to 1



1 to 10



0 to 1



1 to 100



None of these


2. The optimistic decision criterion is the criterion of ________.



maximax



maximin



realism



equally likely



minimax regret


3. A market research survey is available for $10,000. Using a decision tree analysis, it is found that the expected monetary value with no survey is $62,000. If the expected value of sample information is -$7,000, what is the expected monetary value with the survey?



$45,000



$62,000



-$17,000



$55,000



None of these


4. Suppose that we determine the probability of a warm winter based on the number of warm winters experienced over the past 10 years. In this case, we have used ________.



relative frequency



the classical method



the logical method



subjective probability



None of these

5. The expected value of sample information (EVSI) can be used to



establish a maximum amount to spend on additional information.



calculate conditional probabilities.



establish risk avoidance.



provide points on a utility curve.



None of thes



-1 to 1



1 to 10



0 to 1



1 to 100



None of these

Explanation / Answer

1)D

2)A

3)A

4)D

5)D