Question

The decision situations wherein the decision-maker chooses to consider several possible outcomes and the probabilities of their occurrence can be stated are called _____________.a. decisions under risk.b. decisions under maximum probability.c. decisions based on expectation.d. decisions under likelihood.

Answer 1

Answer: The correct answer is "a. decisions under risk.".

Explanation: The decision situations wherein the decision-maker chooses to consider several possible outcomes and the probabilities of their occurrence can be stated are called decisions under risk.

Decision-making under risk is one of the three possible decision-making scenarios based on the available information, this scenario presents an intermediate situation between decision-making under certainty or under uncertainty: each alternative, strategy or course of action has several possible consequences, but the person in charge of making the decision knows the probability of each of them.