MAT 540 Week 3 Quiz 2:
1. The coefficient of optimism is a measure of the decision maker’s optimism. TRUE/ FALSE
2. A payoff table is a means of organizing a decision situation, including the payoffs from different decisions given the various states of nature. TRUE/ FALSE
3. The maximin criterion results in the maximum of the minimum payoffs. TRUE/ FALSE
4. A state of nature is an actual event that may occur in the future. TRUE/ FALSE
5. The ______________ minimizes the maximum regret.
maximax regret criterion
minimax regret criterion
minimin regret criterion
maximin regret criterion
6. The maximin criterion results in the
minimum of the maximum payoffs
maximum of the maximum payoffs
maximum of the minimum payoffs
minimum of the minimum payoffs
7. A dominant decision is one that has better payoff than another decision under each state of nature. TRUE/ FALSE
8. The maximin approach to decision making refers to
minimizing the maximum return
maximizing the minimum return
maximizing the maximum return
minimizing the minimum return
9. The maximax criterion results in the maximum of the minimum payoffs. TRUE/ FALSE
10. Determining the worst payoff for each alternative and choosing the alternative with the best worst is called
maximin
minimin
maximax
minimax
11. The Hurwicz criterion is a compromise
for the maximin criterion
for the maximax criterion
between the maximax and maximin criteria
none of the above
12. The maximax criterion results in the
maximum of the minimum payoffs
maximum of the maximum payoffs
minimum of the maximum payoffs
minimum of the minimum payoffs
13. Regret is the difference between the payoff from the best decision and all other decision payoffs. TRUE/ FALSE
14. Regret is the difference between the payoff from the
best decision and all other decision payoffs
worst decision and all other decision payoffs
best decision and the worst decision payoffs
none of the above
15. The minimax regret criterion
maximizes the minimum regret
minimizes the minimum regret
minimizes the maximum regret
maximizes the maximum regret
16. The Hurwicz criterion is a compromise between the maximax and maximin criteria.
TRUE/ FALSE
17. The term opportunity loss is most closely related to
maximin regret
maximax regret
minimax regret
minimin regret
18. The equal likelihood criterion multiplies the decision payoff for each state of nature by an equal weight. TRUE/ FALSE
19. The basic decision environment categories are
certainty
risk
uncertainty
all of the above
20. Expected opportunity loss is the expected value of the regret for each decision.
TRUE/ FALSE
