The difference between expected payoff under certainty and expected value of the best act without certainty is the _______.
A) expected net present value
B) expected value of perfect information
C) expected rate of return
D) expected monetary value

Question

The difference between expected payoff under certainty and expected value of the best act without certainty is the  _______.
A) expected net present value
B) expected value of perfect information
C) expected rate of return
D) expected monetary value

Quizplus · Accepted Answer

The difference between expected payoff under certainty and expected value of the best act without certainty is known as the expected value of perfect information. It represents the additional value obtained by having perfect information about the outcome. Therefore, the best choice is option B, which describes this concept.

The Difference Between Expected Payoff Under Certainty and Expected Value