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COMP90054_2025_SM2 Practice Quiz: Markov Decidion Processes (MDPs) (not assessed)

Numerical

You want to buy a new guitar. There are three options: Maton, Fender, and Martin; but you are worried about the dreaded 'buyers remorse'. If you buy a Maton (your dream acoustic guitar!), you think there is an 80% chance that you will feel +100 better (your reward/return); but because it is so expensive, there is a 20% chance of buyer's remorse, which will make you feel -100 (that's a negative reward) If you buy a Fender, you think there is an 70% chance that you will feel +70 better; and a 30% you feel -100. If you buy a Martin, you think there is an 60% chance that you will feel +100 better;  a 20% you feel -40; and a 20% that you can sell it to your idiot brother whose name is Martin and buys anything that bears his name, which makes you slightly happy (feel +10) What is the expected return of the Maton?

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To evaluate the expected return, we consider each outcome, its probability, and its payoff. The Maton option has two possible outcomes:\n- With probability 0.80, ......Login to view full explanation

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