Please help me answer and explain 4:03 PM ???..all T-Mobile LTE? pdf-12 - Read-o

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Please help me answer and explain

4:03 PM ???..all T-Mobile LTE? pdf-12 - Read-only K? Read Only - You can't save changes to this 4) Choosing DA1 will yield a return of either 5 or -3. Question 7 Consider the following payoff table DA: Decision Alternative. State of Nature Decision Alternative Good Bad 0.7 12 DA1 DA2 DA3 DA4 15 What is the best decision alternative using the Expected Value criterion? 0 1) DA1 2) DA2 3) DA3 4) DA4 Question 8 Consider the following payoff table: DA: Decision Alternative. State of Nature Decision Alternative Good Bad 0.7 12 0.3 OA1 DA2 DA3 DA4 15 What is the Expected value under perfect Information (EVUP1) X O1) 1.3 2) 12.9 3) 1.29 4) 1.59 EVPI Formula Question 9 The correct formula for EVPI is?

Explanation / Answer

7)

here expected value of DA1 =E(DA1)=0.3*2+0.7*(-3)=-1.5

expected value of DA2 =E(DA2)=0.3*6+0.7*(12)=10.2

expected value of DA3 =E(DA3)=0.3*15+0.7*(5) =8

expected value of DA4 =E(DA4)=0.3*(-5)+0.7*(4) =1.3

as expected value =max(E(DA1),E(DA2),E(DA3),E(DA4)) =max(-1.5,10.2,8,1.3)=10.2

hence best alternateive desicion is DA2

8)

Expected value under perfect decision: EVUPI=P(good)*value of best decision under good nature+ P(bad)*value of best decision under bad nature

=0.3*15+0.7*12=12.9

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