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MAT 540 Quiz 2
Points Received: 40/40(100%)
1. The Hurwicz criterion is a compromise between the maximax and maxmin criteria
• True
• False
2. Regret is the difference between the payoff from the
• Best decision and all other decision payoffs
• Worst decision and all other decision payoffs
• Best decision and the worst decision payoffs
• Non of the above
3. Regret is the difference between the payoff from the best and all other decision payoffs.
• True
• False
4. A state of nature is an actual event that may occur in the future
• True
• False
5. The maximax criterion results in the maximum of the minimum payoffs
• True
• False
6. The maximax criterion results in the
• Maximum of the minimum payoffs
• Maximum of the maximum payoffs
• Minimum of the maximum payoffs
• Minimum of the minimum payoffs
7. The Hurwicz criterion is a compromise
• For the maximin criterion
• For the maximax criterion
• Between the maximax and maximin criteria

2. • None of the above
8. The maximin criterion results in the maximum of the minimum payoffs.
• True
• False
9. The term opportunity loss is most closely related to
• Maximin regret
• Maximax regret
• Minimax regret
• Minimum regret
10. The coefficient of optimism is a measure of the decision maker’s optimism
• True
• False
11.The minimax regret criterion
• Maximizes the minimum regret
• Minimizes the minimum regret
• Minimizes the maximum regret
• Maximizes the maximum regret
12. determining the worst payoff for each alternative and choosing the alternative with the best
worst is called
• Maximin
• Minimin
• Maximax
• Minimax
13.A payoff table is a means of organizing a decision situation, including the payoffs from
different decisions given the various states of nature
• True
• False
14. The maximin approach to decision making refers to
• Minimizing the maximum return
• Maximizing the minimum return
• Maximizing the maximum return
• Minimizing the minimum return

3. 15.The basic environment categories are
• Certainty
• Risk
• Uncertainty
• All of the above
16. the equal likelihood criterion multiples the decision payoff for each state of nature by an
equal weight.
• True
• False
17.The _____________minimizes the maximum regret.
• maximax regret criterion
• minimax regret criterion
• minimin regret criterion
• maximin regret criterion
18. Expected opportunity loss is the expected value of the regret for each decision
• True
• False
19.The maximin criterion results in the
• Minimum of the maximum payoffs
• Maximum of the maximum payoffs
• Maximum of the minimum payoffs
• Minimum of the minimum payoffs
20.A dominant decision is one that has better payoff than another decision under each state of
nature
• True
• False