Answer (D) is correct . Perfect information permits certainty that a future state of nature will occur. The expected value of perfect information determines the maximum amount a decision maker is willing to pay for information. It is the difference between the expected value without perfect information, that is, the expected value of the best action under uncertainty and the expected value under certainty. Under certainty, a decision maker knows in each case which state of nature will occur and can act accordingly.
Answer (A) is incorrect because The expected value of perfect information is the difference between the expected profit under certainty and the profit from the best decision under uncertainty.
Answer (B) is incorrect because The expected value of perfect information is the excess of the total conditional profits under certainty over the profit from the best decision under uncertainty.
Answer (C) is incorrect because There is no expected opportunity loss under conditions of certainty.
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