The __________ is the average of the payoffs associated with a particular alternative weighted with the probabilities for each state of nature.
A)expected value of perfect information (EVPI)
B)expected monetary value (EMV)
C)expected value under risk (EVUR)
D)expected value under certainty (EVUC)

Question

Quizplus · Accepted Answer

The Expected Monetary Value (EMV) is calculated by taking the average of the payoffs associated with a particular alternative, where each payoff is weighted by the probability of its corresponding state of nature occurring. This concept is widely used in decision-making processes under risk to evaluate different alternatives.

The __________ Is the Average of the Payoffs Associated with a Particular