 Hello and welcome to the session. In this session we are going to discuss the following question and the question says that given the following payoff of three acts A1, A2, A3 and their events E1, E2, E3 The probabilities of events are 0.2, 0.5 and 0.3 respectively. Calculate and tabulate expected value of each act and conclude which of the acts can be chosen as the best course of action. Now let us start with the solution of the given question. In this question our table is given to us that shows payoff of three acts A1, A2 and A3 and their events E1, E2 and E3. Also we are given that probability of event E1 is equal to 0.2, probability of event E2 is equal to 0.5 and probability of event E3 is equal to 0.3. Now let us draw a table to find expected value of each act and we know that the expected value is given by the formula that is E of capital X is equal to summation of small x into probability of small x. So here expected value of act A1 will be equal to 12 into 0.2 plus 20 into 0.5 plus 16 into 0.3. On solving this we will get 17.2, so expected value of act A1 is equal to 17.2. Similarly expected value of act A2 will be equal to minus 10 into 0.2 plus of minus 5 into 0.5 plus 8 into 0.3 and this is equal to minus of 2.1. So expected value of act A2 is equal to minus of 2.1. Now expected value of act A3 will be equal to 15 into 0.2 plus 10 into 0.5 plus minus of 9 into 0.3 and on solving this we get 5.3. That is expected value of act A3 is equal to 5.3. So here we see that the expected value of act A1 is maximum thus act A1 is concluded as the best course of action which is the required answer. This completes our session. Hope you enjoyed this session.