In making decisions under risk
A) maximizing expected value is always the best rule.
B) mean variance analysis is always the best rule.
C) the coefficient of variation rule is always best.
D) maximizing expected value is most reliable for making repeated decisions with identical probabilities.
E) none of the above

Question

Quizplus · Accepted Answer

Maximizing expected value is most reliable for making repeated decisions with identical probabilities because it is based on the principle of maximizing long-term gains. Mean variance analysis and the coefficient of variation rule may be useful in certain situations, but they do not always provide the most reliable decision-making guidance.

In Making Decisions Under Risk