A student wanted to find out the optimal strategy to study for a Business Statistics exam. He constructed the following payoff table based on the average amount of time he needed to put in every week studying for the course and the degree of difficulty of the exam. From the information that he gathered from students who had taken the course, he concluded that there was a 40% probability that the exam would be easy.
16 hours
8 hours
4 hours
Easy Exam
40
60
80
Difficult Exam
100
50
0
What is the opportunity loss of spending 4 hours per week on average studying for the exam when the exam turns out to be easy?