Question 1:

1.1. Discuss the differences among decision making under:

(i) certainty, (ii) risk, (iii) uncertainty. (6)

1.2. Give the technique that results in a pessimistic decision and the one that results in an optimistic decision. (2)

1.3. What is the main difference between the expected monetary value and the expected value with perfect information? (4)

1.4. List 3 pitfalls of regression analysis. (3)

1.5. Briefly explain what information is provided by an F-test (2)

1.6. Discuss the relationship between r 2 and adjusted r 2 . Further, explain which of these take into account the number of independent variables. (3)