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Q: Statistics ( No Answer,   1 Comment )
Question  
Subject: Statistics
Category: Miscellaneous
Asked by: cop189-ga
List Price: $10.00
Posted: 24 Apr 2005 15:04 PDT
Expires: 24 May 2005 15:04 PDT
Question ID: 513619
I was curious as to how a person calculates the expected payoff
dealing with states of nature. An example:

                              States of nature

                  High Sales       Med.Sales        Low Sales
                    A(0.2)           B(0.5)            C(0.3)

A1(sell Juice)      3000              2000             -6000
A2(don't sell)        0                 0                 0  

What would be the expected payoff for A1 and A2?  What would be a good
recommendation concerning the payoffs? How would I interpret the
results based on practical considerations?
Answer  
There is no answer at this time.

Comments  
Subject: Re: Statistics
From: solidvoid-ga on 25 Apr 2005 08:37 PDT
 
The expected payoff for A1 is 0.2*3000+0.5*2000+0.3*(-6000)=(-200)
The expected payoff for A2 is 0.2*0+0.5*0+0.3*0=0

Recommendation: Don't sell for the market risk is too high.

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