Below you are given a profit payoff table involving three decision alternatives and three states of nature.
DecisionAlternative
States of Nature
s1
s2
s3?
A
-25
10
15B
16
-5
8C
15
25
-10?
The probability of occurrence of s1 is .1 and the probability of occurrence of s2 is .3.
The recommended decision alternative based on the expected value is
A. A.
B. B.
C. C.
D. Both A and B are optimal.
Answer: A
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