Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
The expected monetary value method
The expected pay off as profit associated with a described combination of act and event is acquired by multiplying the pay off for that act and event combination by the probability of occurrence of the described event. The expected monetary value or EMV of an act is the sum of all expected conditional profits associated along with that act
Illustration
A manager has a choice among
i. A risky contract promising of shs 7 million along with probability 0.6 and shs 4 million along with probability 0.4 and
ii. A diversified portfolio consisting of two contracts along with independent outcomes each promising Shs 3.5 million along with probability 0.6 and shs 2 million along with probability 0.4
Could you arrive at the decision by using EMV method?
Solution
The conditional payoff table for the problem may be constructed as given below:
(Shillings in millions)
Event Ei
Probability (Ei)
Conditional pay offs decision
Expected pay off decision
(i)
Contract (ii)
Portfolio(iii)
Contract (i) x (ii)
Portfolio (i) x (iii)
Ei
0.6
7
3.5
4.2
2.1
E2
0.4
4
2
1.6
0.8
EMV
5.8
2.9
By using the EMV method the manager must go in for the risky contract that will yield him a higher expected monetary value of shs 5.8 million
If two zeros of the polynomial f(x) = x 4 - 6x 3 - 26x 2 + 138x - 35 are 2 ± √3.Find the other zeros. (Ans:7, -5) Ans : Let the two zeros are 2 +√3 and 2 - √3 Sum of
x+8/2=5x/6
real numbers?
i have question like proof, can you please help me on it?
Evaluate following integrals. (a) ∫ 3e x + 5 cos x -10 sec 2 x dx (b) ( 23/ (y 2 + 1) + 6 csc y cot y + 9/ y dy Solution (a) ∫ 3e x + 5 cos x -10 sec 2 x
Leslie ordered a slice of pizza for $1.95, a salad for $2.25, and a soda for $1.05. What was the total cost of her order? The cost of every item must be added together; $1.95 +
Suppose you are in the market for a new home and are interested in a new housing community under construction in a another city. a) The sales representative informs you that the
Tommy has a Nexus 4 that charges poorly. He placed his phone to charge,after 20 minutes the phone was 27% and after 85 minutes the phone was at 66%. Find how many percentage the p
report on shares and dovidend using newspaper
how can i easily solve the trignometry question?
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd