BUSOBA 2321 MIDTERM QUESTIONS AND
CORRECT ANSWERS LATEST 2025-2026 UPDATE
Steps to calculating indifference point - Answer-1) Determine Equations
for each
2) Set each equation equal to each other and solve for Q
3) make indifference point table, set test points, plug back into equation
4) determine which points yield the highest profit
MAXIMAX - Answer-optimistic, choosing biggest return option
(rows), then max of these options
MAXMIN - Answer-pessimistic, choosing the smallest return option
(rows), then take the max of these options
MINIMAX Regret - Answer-1) find best outcome for each state of
nature (column)
2) determine the regret for each combo
- what you could have had - what you got aka
best payoff - actual payoff
3) find the max regret of each option (row)
, 4) take the min of these max'sperfec
EMV stands for - Answer-expected monetary value
EMV 's are - Answer-the lines on your graph
how to find EMV - Answer-Value (p) + Value (p-1)
EMV Max - Answer-range of solutions
ex:
0 <= p <= .3 A
.3 <= p <= .7 B
.7 <= p <= 1 C
- find these by setting EMV's = to each other
- this is the line that is made when all EMV's are graphed and you are
looking at the maximum solutions
EVwPI means - Answer-expected value with perfect info
- perfect info would tell us with certainty what outcome is going to occur
CORRECT ANSWERS LATEST 2025-2026 UPDATE
Steps to calculating indifference point - Answer-1) Determine Equations
for each
2) Set each equation equal to each other and solve for Q
3) make indifference point table, set test points, plug back into equation
4) determine which points yield the highest profit
MAXIMAX - Answer-optimistic, choosing biggest return option
(rows), then max of these options
MAXMIN - Answer-pessimistic, choosing the smallest return option
(rows), then take the max of these options
MINIMAX Regret - Answer-1) find best outcome for each state of
nature (column)
2) determine the regret for each combo
- what you could have had - what you got aka
best payoff - actual payoff
3) find the max regret of each option (row)
, 4) take the min of these max'sperfec
EMV stands for - Answer-expected monetary value
EMV 's are - Answer-the lines on your graph
how to find EMV - Answer-Value (p) + Value (p-1)
EMV Max - Answer-range of solutions
ex:
0 <= p <= .3 A
.3 <= p <= .7 B
.7 <= p <= 1 C
- find these by setting EMV's = to each other
- this is the line that is made when all EMV's are graphed and you are
looking at the maximum solutions
EVwPI means - Answer-expected value with perfect info
- perfect info would tell us with certainty what outcome is going to occur
