Question 1

The equally likely criterion assigns a probability of 0.5 to each state of nature.
Multiple Choice Questions

Accepted Answer

A) True 
 B)False

Question 2

The maximin criterion is an optimistic criterion.

Accepted Answer

A) True 
 B)False

Question 3

Figure 
-The minimax regret strategy is:

Accepted Answer

A)  Buy.
B)  Rent.
C)  Lease.
D)  High.
E)  Low.F) B) and D)
G) A) and C)

Question 4

A weakness of the maximin approach is that it loses some information.

Accepted Answer

A) True 
 B)False

Question 5

Determining the worst payoff for each alternative and choosing the alternative with the "best worst" is the criterion called:

Accepted Answer

A)  minimin.
B)  maximin.
C)  maximax.
D)  maximum likelihood.
E)  Bayes decision rule.F) A) and D)
G) C) and E)

Question 6

The maximin approach involves choosing the alternative that has the "best worst" payoff.

Accepted Answer

A) True 
 B)False

Question 7

The maximax approach is an optimistic strategy.

Accepted Answer

A) True 
 B)False

Question 8

Figure 
-The equally likely strategy is:

Accepted Answer

A)  small.
B)  medium.
C)  medium large.
D)  large.
E)  extra large.F) A) and E)
G) A) and D)

Question 9

The minimax regret criterion is a conservative criterion.

Accepted Answer

A) True 
 B)False

Question 10

The maximum likelihood criterion ignores the payoffs for states of nature other than the most likely one.

Accepted Answer

A) True 
 B)False

Question 11

The Laplace criterion treats states of nature as being equally likely.

Accepted Answer

A) True 
 B)False  True

Question 12

Figure 
-The realism strategy with a pessimism-optimism index of 0.5 is:

Accepted Answer

A)  Buy.
B)  Rent.
C)  Lease.
D)  High.
E)  Low.F) A) and B)
G) A) and C)

Question 13

The maximin approach involves choosing the alternative with the highest payoff.

Accepted Answer

A) True 
 B)False  False

Question 14

Figure 
-The maximax strategy is:

Accepted Answer

A)  Buy.
B)  Rent.
C)  Lease.
D)  High.
E)  Low.F) All of the above
G) A) and D)

Question 15

Which of the following is not a criterion for decision making?

Accepted Answer

A)  EVPI.
B)  Maximin.
C)  Maximax.
D)  Equally likely.
E)  Maximum likelihood.F) C) and D)
G) B) and D)

Question 16

The maximin criterion refers to:

Accepted Answer

A)  minimizing the maximum return.
B)  maximizing the minimum return.
C)  choosing the alternative with the highest payoff.
D)  choosing the alternative with the minimum payoff.
E)  None of the above.F) A) and E)
G) A) and D)

Question 17

Figure 
-The maximum likelihood strategy is:

Accepted Answer

A)  small.
B)  medium.
C)  medium large.
D)  large.
E)  extra large.F) A) and B)
G) A) and C)

Question 18

Figure 
-The maximin strategy is:

Accepted Answer

A)  small.
B)  medium.
C)  medium large.
D)  large.
E)  extra large.F) All of the above
G) D) and E)

Question 19

Figure 
-The equally likely strategy is:

Accepted Answer

A)  Buy.
B)  Rent.
C)  Lease.
D)  High.
E)  Low.F) B) and C)
G) A) and B)

Question 20

Figure 
-The minimax regret strategy is:

Accepted Answer

A)  small.
B)  medium.
C)  medium large.
D)  large.
E)  extra large.F) C) and D)
G) B) and C) D

Exam 10: Cd Supplement - Decision Analysis

The equally likely criterion assigns a probability of 0.5 to each state of nature. Multiple Choice Questions

Correct AnswerverifiedShow Answer

The maximin criterion is an optimistic criterion.

Correct AnswerverifiedShow Answer

Figure -The minimax regret strategy is:

Correct AnswerverifiedShow Answer

A weakness of the maximin approach is that it loses some information.

Correct AnswerverifiedShow Answer

Determining the worst payoff for each alternative and choosing the alternative with the "best worst" is the criterion called:

Correct AnswerverifiedShow Answer

The maximin approach involves choosing the alternative that has the "best worst" payoff.

Correct AnswerverifiedShow Answer

The maximax approach is an optimistic strategy.

Correct AnswerverifiedShow Answer

Figure -The equally likely strategy is:

Correct AnswerverifiedShow Answer

The minimax regret criterion is a conservative criterion.

Correct AnswerverifiedShow Answer

The maximum likelihood criterion ignores the payoffs for states of nature other than the most likely one.

Correct AnswerverifiedShow Answer

The Laplace criterion treats states of nature as being equally likely.

Correct AnswerverifiedTrue

Figure -The realism strategy with a pessimism-optimism index of 0.5 is:

Correct AnswerverifiedShow Answer

The maximin approach involves choosing the alternative with the highest payoff.

Correct AnswerverifiedFalse

Figure -The maximax strategy is:

Correct AnswerverifiedShow Answer

Which of the following is not a criterion for decision making?

Correct AnswerverifiedShow Answer

The maximin criterion refers to:

Correct AnswerverifiedShow Answer

Figure -The maximum likelihood strategy is:

Correct AnswerverifiedShow Answer

Figure -The maximin strategy is:

Correct AnswerverifiedShow Answer

Figure -The equally likely strategy is:

Correct AnswerverifiedShow Answer

Figure -The minimax regret strategy is:

Correct AnswerverifiedD

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True

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False

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D