The expected value with perfect information:
A) equals EVPI - Maximum EMV.
B) requires that each decision alternative have a known probability of occurrence.
C) is an input into the calculation of the expected value of perfect information.
D) is the average of the maximax and the maximin.
E) none of these

Question

Quizplus · Accepted Answer

The expected value with perfect information is an input into the calculation of the expected value of perfect information. It represents the expected value if the decision maker had perfect information about the outcomes of each alternative. The other choices are incorrect: A) The expected value with perfect information does not equal the EVPI minus the maximum EMV, although these are related concepts. B) The probabilities of each decision alternative do not need to be known for the calculation of the expected value with perfect information. D) The expected value with perfect information is not the average of the maximax and the maximin.

The Expected Value with Perfect Information