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Statistics Chapter 17

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Chapter 17 review quiz
Bradford Richard
Quiz by Bradford Richard, updated more than 1 year ago
Bradford Richard
Created by Bradford Richard over 8 years ago
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Resource summary

Question 1

Question
There are three components to any decision:
Answer
  • 1. the choices available, or alternatives 2. the states of nature, which are not under the control of the decision maker 3. the payoffs
  • 1. The goals of the decider 2. The steps to reach the goal 3. The risks invovled
  • 1. The total list of options 2. The option with the best return 3. Selecting the best option

Question 2

Question
Event
Answer
  • Uncertainty regarding future demand. State of nature (future demand) unknown. Decision maker has no control over state of nature.
  • Two or more courses of action open to decision maker. Decision maker must evaluate alternatives. Decision maker selects a course of action based on certain criteria. Depending on the set of circumstances, these criteria may be quantitative, psychological, sociological, and so on.
  • Profit. Break even. Loss.

Question 3

Question
Act
Answer
  • Uncertainty regarding future demand. State of nature (future demand) unknown. Decision maker has no control over state of nature.
  • Two or more courses of action open to decision maker. Decision maker must evaluate alternatives. Decision maker selects a course of action based on certain criteria. Depending on the set of circumstances, these criteria may be quantitative, psychological, sociological, and so on.
  • Profit. Break even. Loss.

Question 4

Question
Outcome Payoff Consequence
Answer
  • Profit. Break even. Loss.
  • Two or more courses of action open to decision maker. Decision maker must evaluate alternatives. Decision maker selects a course of action based on certain criteria. Depending on the set of circumstances, these criteria may be quantitative, psychological, sociological, and so on.
  • Uncertainty regarding future demand. State of nature (future demand) unknown. Decision maker has no control over state of nature.

Question 5

Question
EMV(Ai)
Answer
  • refers to the expected monetary value of decision alternative, i. There may be many decisions possible. We will let 1 stand for the first decision, 2 for the second, and so on. The lower- case letter i represents the entire set of decisions.
  • refers to the probability of the states of nature. There can be an unlimited number, so we will let j represent this possible outcome.
  • refers to the value of the payoffs. Note that each payoff is the result of a combination of a decision alternative and a state of nature.

Question 6

Question
P(Sj)
Answer
  • refers to the probability of the states of nature. There can be an unlimited number, so we will let j represent this possible outcome.
  • refers to the value of the payoffs. Note that each payoff is the result of a combination of a decision alternative and a state of nature.
  • refers to the expected monetary value of decision alternative, i. There may be many decisions possible. We will let 1 stand for the first decision, 2 for the second, and so on. The lower- case letter i represents the entire set of decisions.

Question 7

Question
V(Ai, Sj)
Answer
  • refers to the value of the payoffs. Note that each payoff is the result of a combination of a decision alternative and a state of nature.
  • refers to the probability of the states of nature. There can be an unlimited number, so we will let j represent this possible outcome.
  • refers to the expected monetary value of decision alternative, i. There may be many decisions possible. We will let 1 stand for the first decision, 2 for the second, and so on. The lower- case letter i represents the entire set of decisions.

Question 8

Question
A method to analyze a decision regarding which property to buy is to determine the profit that might be lost because the state of nature (the market behaviour) was not known at the time the land developer bought the land.
Answer
  • opportunity loss or regret
  • opportunity gains
  • best decision method
  • opportunity decision regret

Question 9

Question
An opportunity loss table can be developed by taking:
Answer
  • The difference between the optimal decision and any other decision made.
  • The difference between the opportunity loss and the optimal decision made.
  • The difference between the opportunity loss and any other decision made
  • The difference between the optimal and the least optimal decisions.

Question 10

Question
EOL(Ai)
Answer
  • refers to the expected opportunity loss for a particular decision alternative.
  • refers to the probability associated with the states of nature, j.
  • refers to the regret or loss for a particular combination of a state of nature and a decision alternative.

Question 11

Question
P(Sj)
Answer
  • refers to the expected opportunity loss for a particular decision alternative.
  • refers to the probability associated with the states of nature, j.
  • refers to the regret or loss for a particular combination of a state of nature and a decision alternative.

Question 12

Question
R(Ai, Sj)
Answer
  • refers to the expected opportunity loss for a particular decision alternative.
  • refers to the probability associated with the states of nature, j.
  • refers to the regret or loss for a particular combination of a state of nature and a decision alternative.

Question 13

Question
The lowest expected opportunity loss and highest expected payoff will...
Answer
  • Always lead to the same decision concerning which course of action to follow.
  • Always lead to the opposite decision concerning which course of action to follow.
  • Usually lead to a similar decision concerning which course of action to follow.
  • Always lead to a different decision concerning which course of action to follow.

Question 14

Question
maximin strategy
Answer
  • The strategy that maximizes the minimum gain
  • The strategy that maximizes the maximum gain
  • The strategy that minimizes the maximum regret

Question 15

Question
maximax strategy
Answer
  • The strategy that maximizes the minimum gain
  • The strategy that maximizes the maximum gain
  • The strategy that minimizes the maximum regret

Question 16

Question
minimax regret strategy
Answer
  • The strategy that maximizes the minimum gain
  • The strategy that maximizes the maximum gain
  • The strategy that minimizes the maximum regret

Question 17

Question
Value of perfect information is
Answer
  • The difference between the maximum payoff under conditions of certainty and the maximum payoff under uncertainty.
  • The difference between the minimum payoff under conditions of uncertainty and the minimum payoff under certainty.
  • Very valuable information
  • Statistical data with a zero degree of error.

Question 18

Question
Sensitivity analysis
Answer
  • lets you see how accurate the probability estimates must be to feel comfortable with your choice.
  • Analysis how sensitive the data is to inclimate weather or acts of god.
  • Is the first step in the decision process.
  • Compares objections being voiced with history of experiences.

Question 19

Question
Decision trees
Answer
  • Present a picture of the various courses of action and the possible states of nature.
  • Are long term plans to continually make the best decisions over time.
  • Is a method of growing the accuracy of a choice with more data.
  • Is an alphabetical list of all decisions options.

Question 20

Question
backward induction
Answer
  • Is a strategy to find the best decision in a decision tree.
  • Is a common mistake made by statisticians.
  • Is a decision tree constructed backwards.
  • Is the process of making a decision and verifying it afterwards.

Question 21

Question
The various courses of action are called
Answer
  • The acts or alternatives
  • The decisions
  • The probabilities
  • The Consequences

Question 22

Question
The uncontrollable future events are called
Answer
  • The acts or alternatives
  • The decisions
  • The states of Nature
  • The payoff table

Question 23

Question
The consequence of a particular decision alternative and state of nature is called
Answer
  • The payoff
  • The states of nature
  • The Probabilities
  • The acts or alternatives

Question 24

Question
Probabilities are usually assigned to
Answer
  • The states of nature
  • The acts or alternatives
  • The payoff
  • The decision

Question 25

Question
All possible combinations of decision alternatives and states of nature result in
Answer
  • A payoff table
  • The states of nature
  • The acts or alternatives
  • The probabilities
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