Test 3 - App Stat Multiple Choice
states of nature
a. can describe uncontrollable natural events such as floods or freezing temperatures.
b. can be selected by the decision maker.
c. cannot be enumerated by the decision maker.
d. All of the alternatives are true. - ANScan describe uncontrollable natural events such as
floods or freezing temperatures.
a payoff
a. is always measured in profit.
b. is always measured in cost.
c. exists for each pair of decision alternative and state of nature.
d. exists for each state of nature. - ANSexists for each pair of decision alternative and state of
nature.
Making good decision
a.requires probabilities for all states of nature.
b.requires a clear understanding of decision alternatives, states of nature, and payoffs.
c.implies that a desirable outcome will occur.
d.All of the alternatives are true. - ANSrequires a clear understanding of decision alternatives,
states of nature, and payoffs.
A decision tree
a.presents all decision alternatives first and follows them with all states of nature.
b.presents all states of nature first and follows them with all decision alternatives.
c.alternates the decision alternatives and states of nature.
d.arranges decision alternatives and states of nature in their natural chronological order. -
ANSarranges decision alternatives and states of nature in their natural chronological order.
Which of the methods for decision making best protects the decision maker from undesirable
results?
a.the optimistic approach
b.the conservative approach
c.minimum regret
d.minimax regret - ANSthe conservative approach
If P(high) = .3, P(low) = .7, P(favorable | high) = .9, and P(unfavorable | low) = .6, then
P(favorable) =
a. .10
b. .27
c. .30
, d. .55 - ANS.55
The efficiency of sample information is
a.EVSI*(100%)
b.EVSI/EVPI*(100%)
c.EVwoSI/EVwoPI*(100%)
d.EVwSI/EVwoSI*(100%) - ANSEVSI/EVPI*(100%)
Decision tree probabilities refer to
a. the probability of finding the optimal strategy
b. the probability of the decision being made
c. the probability of overlooked choices
d. the probability of an uncertain event occurring - ANSthe probability of the decision being
made
For a maximization problem, the conservative approach is often referred to as the
a.minimax approach
b.maximin approach
c.maximax approach
d.minimum approach - ANSmaximin approach
Which of the following approaches to decision making requires knowledge of the probabilities of
the states of nature?
a. minimax regret
b. maximin
c.expected value
d.conservative - ANSexpected value
For a minimization problem, the optimistic approach is often referred to as the
a. minimax approach
b. maximin approach
c. maximax approach
d. minimum approach - ANSminimum approach
Gradual shifting of a time series to relatively higher or lower values over a long period of time is
called
a. periodicity.
b. cycles.
c. seasonality.
d. trend. - ANStrend
The focus of smoothing methods is to smooth out
a. the random fluctuations.
b. wide seasonal variations.
states of nature
a. can describe uncontrollable natural events such as floods or freezing temperatures.
b. can be selected by the decision maker.
c. cannot be enumerated by the decision maker.
d. All of the alternatives are true. - ANScan describe uncontrollable natural events such as
floods or freezing temperatures.
a payoff
a. is always measured in profit.
b. is always measured in cost.
c. exists for each pair of decision alternative and state of nature.
d. exists for each state of nature. - ANSexists for each pair of decision alternative and state of
nature.
Making good decision
a.requires probabilities for all states of nature.
b.requires a clear understanding of decision alternatives, states of nature, and payoffs.
c.implies that a desirable outcome will occur.
d.All of the alternatives are true. - ANSrequires a clear understanding of decision alternatives,
states of nature, and payoffs.
A decision tree
a.presents all decision alternatives first and follows them with all states of nature.
b.presents all states of nature first and follows them with all decision alternatives.
c.alternates the decision alternatives and states of nature.
d.arranges decision alternatives and states of nature in their natural chronological order. -
ANSarranges decision alternatives and states of nature in their natural chronological order.
Which of the methods for decision making best protects the decision maker from undesirable
results?
a.the optimistic approach
b.the conservative approach
c.minimum regret
d.minimax regret - ANSthe conservative approach
If P(high) = .3, P(low) = .7, P(favorable | high) = .9, and P(unfavorable | low) = .6, then
P(favorable) =
a. .10
b. .27
c. .30
, d. .55 - ANS.55
The efficiency of sample information is
a.EVSI*(100%)
b.EVSI/EVPI*(100%)
c.EVwoSI/EVwoPI*(100%)
d.EVwSI/EVwoSI*(100%) - ANSEVSI/EVPI*(100%)
Decision tree probabilities refer to
a. the probability of finding the optimal strategy
b. the probability of the decision being made
c. the probability of overlooked choices
d. the probability of an uncertain event occurring - ANSthe probability of the decision being
made
For a maximization problem, the conservative approach is often referred to as the
a.minimax approach
b.maximin approach
c.maximax approach
d.minimum approach - ANSmaximin approach
Which of the following approaches to decision making requires knowledge of the probabilities of
the states of nature?
a. minimax regret
b. maximin
c.expected value
d.conservative - ANSexpected value
For a minimization problem, the optimistic approach is often referred to as the
a. minimax approach
b. maximin approach
c. maximax approach
d. minimum approach - ANSminimum approach
Gradual shifting of a time series to relatively higher or lower values over a long period of time is
called
a. periodicity.
b. cycles.
c. seasonality.
d. trend. - ANStrend
The focus of smoothing methods is to smooth out
a. the random fluctuations.
b. wide seasonal variations.
