TABLE 17-2 The following payoff matrix is given in dollars.
$\quad $$\quad $$\quad $$\quad $$\quad $$\text {Action}$
$\begin{array} { c c c }
\text { Event } & A & B \
\hline1 & 400 & 700 \
2 & 200 & 500
\end{array}$
Suppose the probability of Event 1 is 0.5 and Event 2 is 0.5.
-Referring to Table 17-2, what is the coefficient of variation for Action A?
A) 12.8%
B) 133.33%
C) 333.3%
D) 33.3%

Question

TABLE 17-2  The following payoff matrix is given in dollars.
$\quad $$\quad $$\quad $$\quad $$\quad $$\text {Action}$
 $\begin{array} { c c c } 
\text {  Event } & A & B \
\hline1 & 400 & 700 \
2 & 200 & 500
\end{array}$ 
Suppose the probability of Event 1 is 0.5 and Event 2 is 0.5.
-Referring to Table 17-2, what is the coefficient of variation for Action A?
A) 12.8%
B) 133.33%
C) 333.3%
D) 33.3%

Quizplus · Accepted Answer

The coefficient of variation is calculated as the standard deviation divided by the expected value. For Action A, the expected value is (0.5 * 400) + (0.5 * 200) = 300. The standard deviation is calculated as the square root of [(0.5 * (400 - 300)^2) + (0.5 * (200 - 300)^2)] = 100. The coefficient of variation is (100 / 300) * 100% = 33.3%.

TABLE 17-2 the Following Payoff Matrix Is Given in Dollars