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Multiple Choice Quiz
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1.
Which of the following is not a criterion for decision making under uncertainty?
A)EVPI
B)Maximin
C)Maximax
D)Laplace method
E)Minimax regret
2.
Which one of the following statements is not correct relative to decision making under risk?
A)The sum of the state-of-nature probabilities must be 1.00.
B)Every probability must be greater than or equal to zero.
C)All probabilities are assumed to be equal.
D)Probabilities are used to compute expected values.
E)Perfect information assumes that the state of nature that will actually occur is known.
3.
The next three questions are based on the following payoff table of the present values:

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The maximax strategy is:
A)buy
B)lease
C)rent
D)high
E)low
4.
The maximin strategy is:
A)buy
B)lease
C)rent
D)high
E)low
5.
If the probability of the state of nature "high" is 0.7, the decision with the highest expected value is:
A)buy
B)lease
C)rent
D)high
E)low
6.
Which one of these refers to decision making under risk?
A)EVPI
B)Minimax regret
C)Maximin
D)Maximax
E)Laplace
7.
The expected monetary value approach is most appropriate when the decision make is:
A)risk averse
B)risk seeking
C)risk neutral
D)risk free
E)risky





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