Question 10 (5 points)

For a seven-year moving average, how many values will be lost at the beginning and end of the time series?

Question 10 options:

	0 at the start and 2 at the end
	3 at the start and 0 at the end
	1 at the start and 1 at the end
	0 at the start and 3 at the end
	3 at the start and 3 at the end

Question 11 (5 points)

Determine the expected value for the following payoff table.

Event	Payoff($)	Probability of Event
Market rise	$600	0.4
Market decline	$250	0.6

Question 11 options:

	$0
	$200
	$390
	$410

Question 12 (5 points)

CanaSystems is considering a project to build upscale condominiums. They are considering plans on a small, medium, or large development and balancing possible future demand as low, moderate and high. Profits have been estimated and are summarized in a payoff table.

Act	State of Nature ($millions)
	Low Demand	Moderate Demand	High Demand
Small	8	6	13
Medium	4	8	12
Large	-3	12	17

Which table describes the opportunity loss for this situation?

Question 12 options:

Act	Opportunity Loss ($millions)
	Low Demand	Moderate Demand	High Demand
Small	0	2	4
Medium	1	2	5
Large	3	4	0

Act	Opportunity Loss ($millions)
	Low Demand	Moderate Demand	High Demand
Small	0	6	4
Medium	4	4	5
Large	11	0	0

Act	Opportunity Loss ($millions)
	Low Demand	Moderate Demand	High Demand
Small	11	0	0
Medium	7	0	2
Large	0	2	4

Act	Opportunity Loss ($millions)
	Low Demand	Moderate Demand	High Demand
Small	3	0	0
Medium	1	0	2
Large	0	2	4

Question 13 (5 points)

What is the expected value of perfect information for the payoff table provided? The probability of a market rise is P = 0.7 and the probability of a market decline is P = 0.3

Act	State of Nature ($)
	Market Rise	Market Decline
Investment 1	5,000	1,000
Investment 2	7,000	1,000

Question 13 options:

	$800
	$4,000
	$3,200
	$600

Question 14 (5 points)

CanaSystems is considering a project to build upscale condominiums. They are considering plans on a small, medium, or large development and balancing possible future demand as low or high. Profits have been estimated and are summarized in a payoff table.

Act	State of Nature ($millions)
	Low P(0.3)	High P(0.7)
Small	6	11
Medium	5	13
Large	4	18

What is the expected value under conditions of certainty?

Question 14 options:

	$14.4 million
	$9.5 million
	$10.6 million
	$11.4 million

Question 15 (5 points)

To apply the moving-average method to a time series, the data should have a cyclical pattern of fluctuations.

Question 15 options:

	True
	False