Problem 1: A value for probabilistic input from a discrete probability distribution:
a. is the value given by the RAND() function.
b. is given by matching the probabilistic input with an interval of random numbers.
c. is between 0 and 1.
d. must be non-negative
Problem 2: Each point on the efficient frontier graph associated with the Markowitz portfolio model is the:
a. maximum possible risk for the given return.
b. minimum possible risk for the given return
c. maximum return for the least risk
d. minimum diversification for the least risk
Problem 3: The expected utility approach:
a. does not require probabilities
b. leads to the same decision as the expected value approach
c. is most useful when excessively large or small payoffs are possible
d. requires a decision tree
Problem 4: In a multicriteria decision problem:
a. it is impossible to select a single decision alternative
b. the decision maker must evaluate each alternative with respect to each criterion
c. successive decisions must be made over time
d. all of these
Problem 5: When consequences are measured on a scale that reflects a decision maker's attitude toward profit, loss and risk, payoffs are replaced by:
a. utility values
b. multicriteria measures
c. sample information
d. opportunity loss