32253169 X I m ConnectSignlnlMcGraw Hill X E Content X H Course Hero x I + O ( 9 C' a learn.humber.ca/ultra/courses/_186175_1/cl/outline i} a B *- Christaker is considering transitioning to a new job next year. He will either keep his current job which pays a net income of $77,000 or switch to a new job. If he changes jobs, his net income will vary depending on the state of the economy. He estimates that the economy will be Strong with 40% chance ($93,000 net income), Average with 30% chance ($80,000 net income), or Weak with 30% chance ($62,000 net income). Part A 1. What is the best expected value for Christaker and the corresponding decision using the Expected Monetary Value approach? 55 C] Select an answerv 2. What is the expected value of perfect information (EVPI)? $ D Part B Christaker can hire Sandeep, a mathematical economist, to provide information regarding the state of the economy next year. Sandeep will either predict a Good or Bad economy, with probabilities 0.4 and 0.6 respectively. If Sandeep predicts a Good economy, there is a 0.6 chance of a Strong economy, and a 0.36 chance of an Average economv. If Sandeen's prediction is Bad. then the economv has a 04 chance of beina Bb 32253169 X M Connect Sign In | McGraw Hill X Content X Course Hero X C learn.humber.ca/ultra/courses/_186175_1/cl/outline m Paused Update : Christaker can hire Sandeep, a mathematical economist, to provide information X regarding the state of the economy next year. Sandeep will either predict a Good or Bad economy, with probabilities 0.4 and 0.6 respectively. If Sandeep predicts a Good economy, there is a 0.6 chance of a Strong economy, and a 0.36 chance of an Average economy. If Sandeep's prediction is Bad, then the economy has a 0.4 chance of being Weak and 0.42 chance of being Average. 1. If Sandeep predicts Good economy, what is the expected value of the optimal decision? $ 2. If Sandeep predicts Bad economy, what is the expected value of the optimal 28 decision? $ 3. What is the expected value with the sample information (EVwSI) provided by X Sandeep? $ E 4. What is the expected value of the sample information (EVSI) provided by Sandeep? 5. If cost of hiring Sandeep is $910, what is the best course of action for Christaker? Priv TerBb 32253169 X M Connect Sign In | McGraw Hill X Content X Course Hero X -) C learn.humber.ca/ultra/courses/_186175_1/cl/outline m Paused Update : Jump In X 3. What is the expected value with the sample information (EVwSI) provided by Sandeep? $ 4. What is the expected value of the sample information (EVSI) provided by Sandeep? $ 5. If cost of hiring Sandeep is $910, what is the best course of action for Christaker? Select an answer 6. What is the efficiency of the sample information? Round % to 1 decimal place. Check Answer Priv Ter
