It is TRUE or FALSE 1) A decision tree analysis of a problem eliminates the risk

Question

It is TRUE or FALSE

1) A decision tree analysis of a problem eliminates the risks in decision making. 2) optimistic (risk prone) and pessimistic ( risk adverse) never make the same decision 3) A posterior probability is the probability of a state of nature after a test (more information) 4) The expected value of perfect information is the maximum amount a decision-maker would ever pay for additional information 5) different people should sometimes make a different deision with the same problem.

Explain please

Explanation / Answer

1. The answer is given below:

True

The decision tree is a systemized approach while making any major decisions regarding any projects or organization. It clearly shows how effective the results of a decision can be.

2. The answer is given below:

True

An optimistic always thinks in a positive way and always see advantages while handling any issue. A pessimistic is a person who always see the negative aspects of any situation and thinks only about the risk. Hence decision making between an optimistic and pessimistic is always different.

3. The answer is given below:

True

Posterior probability can be defined as a conditional probability that is used after an event take place.

4. The answer is given below:

True

The expected value of information can be defined as money one who spend in order to get perfect information.

5. The answer is given below:

True

Thinking process of different people differs towards same problem.

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