1) Determining the best payoff for each alternative and choosing the alternative with the "best of the best" is the approach called: A) maximax B) maximin C) Laplace D) minimax regret E) expected monetary value Answer: A Page Ref: 323 Topic: Decision Making Under Uncertainty Difficulty: Moderate
2) Determining the worst payoff for each alternative and choosing the alternative with the "best of the worst" is the approach called: A) maximax B) maximin C) Laplace D) minimax regret E) expected monetary value Answer: B Page Ref: 323 Topic: Decision Making Under Uncertainty Difficulty: Moderate
3) The…show more content… Answer: FALSE Page Ref: 323 Topic: Decision Making Under Uncertainty Difficulty: Moderate
19) In decision making under risk, probabilities associated with future events are usually unknown. Answer: FALSE Page Ref: 327 Topic: Decision Making Under Risk Difficulty: Moderate
20) The maximin criterion approach selects the "best of the worst." Answer: TRUE Page Ref: 323 Topic: Decision Making Under Uncertainty Difficulty: Moderate 21) If the coefficient of realism alpha equals 1, then the criterion of realism will yield the same result as the maximax criterion. Answer: TRUE Page Ref: 324 Topic: Decision Making Under Uncertainty Difficulty: Challenging
22) The minimax regret criterion minimizes the maximum opportunity loss within each alternative. Answer: TRUE Page Ref: 325 Topic: Decision Making Under Uncertainty Difficulty: Moderate
23) The expected value of perfect information (EVPI) places a lower bound on how much a decision maker should be willing to pay to obtain perfect information. Answer: FALSE Page Ref: 328 Topic: Decision Making Under Risk Difficulty: Moderate
24) The expected opportunity loss (EOL) will always result in the same decision as the maximum expected monetary value (EMV). Answer: TRUE Page Ref: 328 Topic: Decision Making Under Risk Difficulty: Moderate
25) In a decision tree representation, round nodes represent decision
