(e) Given that the research is done, use your answers in parts (c) and (d) to determine the posterior probabilities of the states of nature for each of the two possible predictions of the research.

T (f) Use the Excel template for posterior probabilities to obtain the answers for part (e).

(g) Given that the research predicts S1, use Bayes’ decision rule to determine which decision alternative should be chosen and the resulting expected payoff.

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(h) Repeat part (g) when the research predicts S2.

(i) Given that research is done, what is the expected payoff when using Bayes’ decision rule?

(j) Use the preceding results to determine the optimal policy regarding whether to do the research and the choice of the decision alternative.

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