00:01
In this question, we have been given a payoff table which shows the profit for a decision analysis with two decision alternatives which are d1 and d2 here and three states of nature which are s1, s2 and s3.
00:13
If the decision maker estimates the following probability for the following three states, so probability of s1 it is given as 0 .1 and probability for s2 it is given to be 0 .5.
00:28
For s3, we have this to be 0 .4.
00:32
We need to find the best decision to be made, include the risk profile associated with our choice.
00:39
Okay, so for this let's see how we are going to do.
00:43
So we can clearly observe, so since expected value, let us first calculate what is the okay, so this we know it is nothing but ev is equals to probability times the event will give the expected value.
01:11
So if i calculate expected value for d1, so it will be what 200 times 0 .1 probability of s1 plus 160 times probability of s2 which is 0 .5 minus 30 times 0 .4...