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
Q. How to Collecting and interpreting data? Ans. Collecting and interpreting data is the most important job of a statistician. There are many types of studies and differe
please let us know above promote products and services..i gave the assignment from my collage
#questionShow that the system oscillates in simple harmonic motion demonstrated by; , for which the general solution where X = (x – x0)..
For the layman, a "function" indicates a relationship among objects. A function provides a model to describe a system. Economists refer to deman
Consider the subsequent IVP. y' = f(t,y) , y(t 0 ) = y 0 If f(t,y) and ∂f/∂y are continuous functions in several rectangle a o - h o + h which is included in a
Position Vector There is one presentation of a vector that is unique in some way. The presentation of the ¯v = (a 1 ,a 2 ,a 3 ) that begins at the point A = (0,0,0) and ends
Given f (x) = - x 2 + 6 x -11 determine each of the following. (a) f ( 2) (b) f ( -10) (c) f (t ) Solution (a) f ( 2) = - ( 2) 2 + 6(2) -11 = -3 (
what is the difference between North America''s part of the total population and Africa''s part
Properties 1. The domain of the logarithm function is (0, ∞ ) . In other terms, we can just plug positive numbers into a logarithm! We can't plug in zero or a negative numbe
how to solve?
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