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Which of the following is a decision-making criterion that is used for decision making under risk?...

Which of the following is a decision-making criterion that is used for decision making under risk? a. expected monetary value criterion b. Hurwicz criterion (criterion of realism) c. optimistic (maximax) criterion d. equally likely criterion

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Answer #1

Which of the following is a decision-making criterion that is used for decision making under risk?

Correct Answer:

  1. Expected monetary value criterion

Justification:

As in the Environment of Decision Making under Risk include various probabilities of Occurrence of different states of Nature, in such case by using following criterion as written below we will select Optimum Course of action,

  • Expected monetary value criterion
  • Expected Opportunity Loss
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