OMGT Quiz 4 Study Guide | Operations Management Review, Key Concepts & Practice
Questions
Suppose that an investor is considering three alternative strategies: conservative, neutral, or
aggressive. If economic conditions get better, then the strategies will return, respectively, 6%,
12%, and 20%. If economic conditions get worse, then the strategies will return, respectively,
4%, 2%, and -8%. If better economic conditions has a probability of only 25%, then using the
expected value criterion which alternative would the investor select? - correct answer
✔✔Indeterminate, since two alternatives are of equal value
In the decision tree shown, the probability of the economy going up must be: - correct answer
✔✔30%
In a decision-making problem with 40 decision alternatives and 5 states of nature, the total
number of possible outcomes is - correct answer ✔✔200
In the decision tree shown, the value 2.75 represents - correct answer ✔✔the expected value
for purchasing Stock A
In the decision tree shown, the Fund with the highest expected value is - correct answer ✔✔the
Bond Fund
In the decision tree shown, the value 5% represents - correct answer ✔✔the expected value
from buying the Bond Fund
Suppose that an investor is considering three alternative strategies: conservative, neutral, or
aggressive. If economic conditions get better, then the strategies will return, respectively, 6%,
12%, and 20%. If economic conditions get worse, then the strategies will return, respectively,
4%, 2%, and -8%. Using the minimax regret criteria, which alternative would the investor select?
- correct answer ✔✔Neutral
Questions
Suppose that an investor is considering three alternative strategies: conservative, neutral, or
aggressive. If economic conditions get better, then the strategies will return, respectively, 6%,
12%, and 20%. If economic conditions get worse, then the strategies will return, respectively,
4%, 2%, and -8%. If better economic conditions has a probability of only 25%, then using the
expected value criterion which alternative would the investor select? - correct answer
✔✔Indeterminate, since two alternatives are of equal value
In the decision tree shown, the probability of the economy going up must be: - correct answer
✔✔30%
In a decision-making problem with 40 decision alternatives and 5 states of nature, the total
number of possible outcomes is - correct answer ✔✔200
In the decision tree shown, the value 2.75 represents - correct answer ✔✔the expected value
for purchasing Stock A
In the decision tree shown, the Fund with the highest expected value is - correct answer ✔✔the
Bond Fund
In the decision tree shown, the value 5% represents - correct answer ✔✔the expected value
from buying the Bond Fund
Suppose that an investor is considering three alternative strategies: conservative, neutral, or
aggressive. If economic conditions get better, then the strategies will return, respectively, 6%,
12%, and 20%. If economic conditions get worse, then the strategies will return, respectively,
4%, 2%, and -8%. Using the minimax regret criteria, which alternative would the investor select?
- correct answer ✔✔Neutral
