Exhibit 14.2
The following questions are based on the information below.
An investor is considering 4 investments, A, B, C and leaving his money in the bank. The payoff from each investment is a function of the economic climate over the next 2 years. The economy can expand or decline. The following payoff matrix has been developed for the decision problem.
-The amount of opportunity lost in making a decision is called
A) loss.
B) frustration.
C) negative profit.
D) regret.

Question

Exhibit 14.2
The following questions are based on the information below.
An investor is considering 4 investments, A, B, C and leaving his money in the bank. The payoff from each investment is a function of the economic climate over the next 2 years. The economy can expand or decline. The following payoff matrix has been developed for the decision problem. 
-The amount of opportunity lost in making a decision is called
A) loss. 
B) frustration. 
C) negative profit. 
D) regret.

Quizplus · Accepted Answer

Regret is the term used to describe the amount of opportunity lost when a decision is made, reflecting on what could have been gained from the best forgone option.

Exhibit 14.2 The Following Questions Are Based on the Information Below