Below you are given an income payoff table involving three decision alternatives and two states of nature.
DecisionAlternative
States of Nature
s1
s2
A
15
12
B
16
12
C
20
7
?
The probability of the occurrence of s1 = .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: B
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