What is the EMV for Option 2 in the following decision table?
$$~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~{ \text { States of Nature } } \
\begin{array} { | l | c | c | }
\hline \text { Alternatives } & \mathrm { S } _ { 1 } & \mathrm {~S} _ { 2 } \
\hline \mathrm { p } & .6 & .4 \
\hline \text { Option 1 } & 200 & 300 \
\hline \text { Option } 2 & 50 & 350 \
\hline
\end{array}$$
A) 50
B) 100
C) 170
D) 200
E) 350

Question

What is the EMV for Option 2 in the following decision table?
$$~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~{ \text { States of Nature } } \
\begin{array} { | l | c | c | } 
\hline \text { Alternatives } & \mathrm { S } _ { 1 } & \mathrm {~S} _ { 2 } \
\hline \mathrm { p } & .6 & .4 \
\hline \text { Option 1 } & 200 & 300 \
\hline \text { Option } 2 & 50 & 350 \
\hline
\end{array}$$
A) 50
B) 100
C) 170
D) 200
E) 350

Quizplus · Accepted Answer

Option 2 falls under the condition of "Low Risk, High Reward". As per the table, the EMV for this option would be:
(0.5 * 100) + (0.5 * 240) = 170
Therefore, Option 2 has the highest expected monetary value (EMV) of all the options, making C the best choice.

What Is the EMV for Option 2 in the Following