CanaSystems is considering a project to build upscale condominiums. They are considering plans on a small, medium, or large development and balancing possible future demand as low or high. Profits have been estimated and are summarized in a payoff table.

Act

State of Nature ($millions)

Low P(0.4)

High P(0.6)

Small

6

11

Medium

5

13

Large

4

18

What is the expected value under conditions of certainty?

Question 8 options:

$13.2 million

$9.5 million

$10.6 million

$11.4 million

Question 9(5 points)

CanaSystems is considering a project to build upscale condominiums. They are considering plans on a small, medium, or large development and balancing possible future demand as low or high. Profits have been estimated and are summarized in a payoff table.

Act

State of Nature ($millions)

Low P(0.3)

High P(0.7)

Small

7

12

Medium

5

13

Large

3

17

What is the expected value under conditions of certainty?

Question 9 options:

$14.0 million

$9.5 million

$10.6 million

$11.4 million

Question 10(5 points)

For a seven-year moving average, how many values will be lost at the beginning and end of the time series?

Question 10 options:

0 at the start and 2 at the end

3 at the start and 0 at the end

1 at the start and 1 at the end

0 at the start and 3 at the end

3 at the start and 3 at the end

Question 11(5 points)

Determine the expected value for the following payoff table.

Event

Payoff($)

Probability of Event

Market rise

$600

0.4

Market decline

$250

0.6

Question 11 options:

$0

$200

$390

$410

Question 12(5 points)

CanaSystems is considering a project to build upscale condominiums. They are considering plans on a small, medium, or large development and balancing possible future demand as low, moderate and high. Profits have been estimated and are summarized in a payoff table.

Act

State of Nature ($millions)

Low

Demand

Moderate Demand

High

Demand

Small

8

6

13

Medium

4

8

12

Large

-3

12

17

Which table describes the opportunity loss for this situation?

Question 12 options:

Act

Opportunity Loss ($millions)

Low

Demand

Moderate Demand

High

Demand

Small

0

2

4

Medium

1

2

5

Large

3

4

0

Act

Opportunity Loss ($millions)

Low

Demand

Moderate Demand

High

Demand

Small

0

6

4

Medium

4

4

5

Large

11

0

0

Act

Opportunity Loss ($millions)

Low

Demand

Moderate Demand

High

Demand

Small

11

0

0

Medium

7

0

2

Large

0

2

4

Act

Opportunity Loss ($millions)

Low

Demand

Moderate Demand

High

Demand

Small

3

0

0

Medium

1

0

2

Large

0

2

4

Question 13(5 points)

What is the expected value of perfect information for the payoff table provided? The probability of a market rise isP= 0.7 and the probability of a market decline isP= 0.3

Act

State of Nature ($)

Market Rise

Market Decline

Investment 1

5,000

1,000

Investment 2

7,000

1,000

Question 13 options:

$800

$4,000

$3,200

$600

Question 14(5 points)

CanaSystems is considering a project to build upscale condominiums. They are considering plans on a small, medium, or large development and balancing possible future demand as low or high. Profits have been estimated and are summarized in a payoff table.

Act

State of Nature ($millions)

Low P(0.3)

High P(0.7)

Small

6

11

Medium

5

13

Large

4

18

What is the expected value under conditions of certainty?

Question 14 options:

$14.4 million

$9.5 million

$10.6 million

$11.4 million

Question 15(5 points)

To apply the moving-average method to a time series, the data should have a cyclical pattern of fluctuations.

Question 15 options:

TrueFalse

Question 16(5 points)

The prices for several "staple" food items for the years 2000 and 2009. Compute the Laspeyres price index for this group of items using 2000=100.

2000

2009

Item

Cost ($)

Quantity

Cost ($)

Quantity

Bread (white, loaf)

0.90

53

2.43

61

Milk (white, litre)

0.97

99

1.80

117

Eggs (white, dozen)

1.71

19

1.81

21

Flour (white,11.36kg)

5.75

5

9.75

8

Butter (salted, 500g)

1.89

14

2.30

13

Question 16 options:

89.6

186.9

182.5

152.8

Question 17(5 points)

The Consumer Price Index (1982-84 = 100) reports a CPI in August 2010 for Rent of Shelter as 239.115. What is the percentage change in the price of Rent of Shelter compared to the base?

Question 17 options:

Increased 139.115 percent

Decreased 139.115 percent

Increased 239.115 percent

Decreased 239.115 percent

Question 18(5 points)

The Consumer Price Index (1982-84 = 100) reports a CPI in August 2010 for Rent of Shelter as 183.116. What is the percentage change in the price of Rent of Shelter compared to the base?

Question 18 options:

Increased 183.116 percent

Decreased 183.116 percent

Increased 283.116 percent

Decreased 283.116 percent

Question 19(5 points)

For a five-year moving average, how many values will be lost at the beginning and end of the time series?

Question 19 options:

0 at the start and 2 at the end

3 at the start and 0 at the end

1 at the start and 1 at the end

0 at the start and 3 at the end

2 at the start and 0 at the end

Question 20(5 points)

From the accompanying table calculate a simple price index for bud tickets using 2005 as the base period. (Round to nearest 10th )

2005 (=100)

2010

Item

Price

Quantity

Price

Quantity

Movie Ticket

$ 7.50

50

$ 9.00

55

Popcorn

$ 1.75

70

$ 2.50

60

Bus Ticket

$ 1.05

40

$ 1.25

45

Question 20 options:

120.0

119.1

142.9

123.8