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
kim had 1/2 an orange. she gave Linda 1/4 of this. What fraction of the whole orange did Linda get?
Barbara is packing a wedding gift that is contained within a rectangular box 20 by 18 by 4 in. How much wrapping paper will she require? a. 512 in 2 b. 1,440 in 2 c. 1,0
Five more than the quotient of a number and 2 is at least that number. What is the greatest value of the number? Let x = the number. Notice that quotient is a key word for div
find a quadratic polynomial whose zeroes are 2 and -6.verify the relationship between the coefficients and zeroes of the polynomial
Question: Consider a digraph D on 5 nodes, named x0, x1,.., x4, such that its adjacency matrix contains 1's in all the elements above the diagonal A[0,0], A[1,1], A[2,2],.., e
calculate
Find out the greater of two consecutive positive odd integers whose product is 143. Let x = the lesser odd integer and let x + 2 = the greater odd integer. Because product is a
State & Prove the arden theorem
If secA= x+1/4x, prove that secA+tanA=2x or 1/2x. Ans: Sec? = x + 1/4x ⇒ Sec 2 ? =( x + 1/4x) 2 (Sec 2 ?= 1 + Tan 2 ?) Tan 2 ? = ( x +
Graph A graph G = (V, E) contains a (finite) set that is denote by V, or by V(G) if one wishes to make clear which graph is under consideration, and a collection E, or E(G), o
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