Question: Answer questions 23-26 based on the payoff table given below. States of Nature Alternatives S1 .6 Option 1 10,000 Option 2 5,000 Option 3 -4,000

Answer questions 23-26 based on the payoff table given below. States of Nature Alternatives S1 .6 Option 1 10,000 Option 2 5,000 Option 3 -4,000 Option 4 -15,000 Que Option 5 -30,000 S2 .4 30,000 45,000 60,000 85,000 100,000 23. According to the pessimistic decision criterion (maximin), which option should be selected? a. Option 1 b. Option 2 C. Option 3 d. Option 4 e. Option 5 Which option maximizes the Expected Monetary Value (EMV)? a. Option 1 b. Option 2 c. Option 3 d. Option 4 e. Option 5 25. What is the maximum EMV? a. 25000 b. 30000 C. 18000 d. 22000 e. 35000 26. What is the expected value of perfect information? a. 18000 b. 21000 C. 24400 d. 15000 e. 28000 24

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