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I was doing LSBF revision kit when I saw that what they taught there was to use the least opportunity loss right away from the Regret Table.
To my understanding, minimax regret is to minimax maximum regret. What I was taught in SAA(SG) was to see what is the maximum regret for each decision making between possible outcomes. And then from all the maximum regret, choose the least maximum regret. That way, we get minimise maximum regret.
^ The data and numerical are correct in the Regret Table.
As you can see the answer key given by LSBF was Project 3 since 100 is the least severe regret. However based on my method, it would be Project 4, using 600 as the least maximum regret.
So I am really confused what is the correct answer. I’m pretty sure I understood minimax regret really well in class and pretty sure it’s Project 4?
This is my answer
I cannot comment on what LSBF have done.
The correct way is the way that I do it in my free lectures on here (which is the way you are doing it).
I do suggest that you watch the lectures – they are a complete free course for paper F5 and cover everything needed to be able to pass the exam well.(I have deleted the first link, because it is breach of copyright for us to have links to copyright material on this website 🙂 )
Hi,
Thanks for your reply,
Apologies for the first link, will take note on that in the future.I have just watched your video and I’m clear of confusion now.
Thanks for the clear explanation and prompt reply!
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