D 5 pts Question 17 Below is a portion of a larger decision tree. Using only...

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math Statistics-And-Probability

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Answer 1

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E(small) =0.4*8+0.6*7 =7.4

E(medium) =0.4*14+0.6*5 =8.6

E(small) =0.4*20+0.6*(-9) =2.6

expected value without perfect information =max(7.4,8.6,2.6) =8.6

expected value with perfect information =0.4*20+0.6*7 =12.2

therefore expected value of perfect information =12.2-8.6 =3.6

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