Question

Q 1

Investment advisers estimated the stock market profit for four market segments with different condition are as follows.

Market Segment	improving	Moderate	stable	declining
Computer	10	8	6	-4
Financial	8	7	5	-3
Manufacturing	6	7	4	-2
Pharmaceuticals	5	6	6	-1

Economic condition

Which payoffs an optimistic decision maker can choose?

A / 10 , 8 , 6 , 5

B/10 , 8 , 6 , -4

C/10 , 8 , 7 , 6

D / 10 , 8 ,6,5

Q2/

Which payoffs an optimistic decision maker can choose?

A / 7

B/10

C/8

D / 6

Q3

Which decision an optimistic decision maker can choose?

A / Computer

B/Financial

C/Manufacturing

D / Pharmaceuticals

Q4

Which status optimistic decision makers guess?

A / improving

B/Moderate

C/stable

D / declining

Q5

Which payoffs a conservative decision maker can choose?

A/ 4 .3 .2. 1

B/4 .5. 6. 7

C/ -4 . -3 . -2 . -1

D/ 10 .8 7. 6

Q6

Which payoff a conservative decision maker can choose?

A / 7

B / -1

C /2

D/ -3

Q7

Which decision a conservative decision maker can choose?

A / Computer

B/Financial

C/Manufacturing

D / Pharmaceuticals

Q8/

Which status conservative decision makers guess?

A / improving

B/Moderate

C/stable

D / declining

Q9

Chose the correct numbers that will be in the First column of the regret table:

A / 10 . 8 . 6 . 5

B/ 10 . 8 . 6 .-4

C/ 0.2 .4 .5

D/ 2 . 0 . 2 . 3

Q10

Chose the correct numbers that will be in the Second column of the regret table:

A / 8 .7 .7 .6

B/ 0 .1 . 1 .2

C/ 2 . 3 .3 .4

D/ -2 .-1 . -1 .0

Q 11

Chose the correct numbers that will be in the Third column of the regret table:

A / 6 . 5 . 4 . 6

B/ 6 . 5 . 4 .5

C/ 0 . 1 . 2 .0

D/ 2 .1 .0 .2

Q12

Chose the correct numbers that will be in the Fourth column of the regret table:

A / -4 . -3 . -2 . -1

B/ 0 . 1 . 2 . 3

C / -3 . -2 . -1 . 0

D/ 3 . 2 . 1 . 0

Q13

Which choices can we made using regret approach?

A/ 3 , 2 , 4 , 5

B/ 0 , 2 , 4 ,5

C/ 1 , 2 , 3 ,4

D/ 3 , 2 ,2 ,5

D/ 4

Q14

Which choice can we made using regret approach?

A /1

B/ 2

C/3

D/4

Q15

Which payoff can we choose using regret approach?

A/ 6

B/4

C/-3

D/-4

Q16

What is the decision, using regret approach?

A / Computer

B/Financial

C/Manufacturing

D / Pharmaceuticals

Q17

Which status regretful decision makers guess?

A / improving

B/Moderate

C/stable

D / declining

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Q18

The following payoff table shows profit for a decision analysis problem with two decision alternatives and three states of nature.

State of Nature

Decision Alternative                                                                                          s1     s2        s3

d1                                                                                                                       250   100      25

d2                                                                                                                       100   100      75

Suppose that the decision maker obtained the probability assessments of s₁ = 0.65 and for s₃ = 0.20

What is the probability of the s₂

A / 0.20

B/ 0.15

C/ 0.10

D/ 0.30

Q19

Using the expected value approach, the choices will be

a/ 182.5 , 95

B/ 186.25 , 96.25

C / 250 , 100

D / 350 , 200

Q20

Using the expected value approach, the optimal decision will be

A /d1 with S1

B / d2 with S2

C/ d2

D / d1

Answer 1

1.

A

It has maximum payoffs for the maximax criteria. So, it will be selected.

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2.

B

It is 10 as payoff for alternative of computers.

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3.

A

It is the computer segment as alternative to be selected.

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4.

A

It is the improving status to be guessed by the optimistic decision makers.

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5.

C

Under the conservative approach, the worst payoffs for all the alternatives are selected.

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6.

B

The best of the worst payoffs is -1.

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7.

D

It is the pharmaceutical segment that will be selected.

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8.

D

It is the declining status, to be selected by the conservative decision maker.

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9.

C

It is the 0, 2, 4 and 5 in the first column.

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10.

B

It is 0, 1, 1, and 2 in the second column.

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11.

C

It is 0, 1, 2, and 0 in the third column.

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12.

D

It is the sequence in fourth column.

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13.

A

Market Segment	improving	Moderate	stable	declining	Maximum regret
Computer	0	0	0	3	3
Financial	2	1	1	2	2
Manufacturing	4	1	2	1	4
Pharmaceuticals	5	2	0	0	5

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14.

B

Minimum of the maximum regret is 2.

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15.

C

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16.

B

It is financial sector for investment.

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17.

D

It is declining as regret.

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