An Investment Opportunity Has Two Possible Outcomes, and the Value

question 107

Multiple Choice

An investment opportunity has two possible outcomes, and the value of the investment opportunity is $250. One outcome yields a $100 payoff and has a probability of 0.25. What is the probability of the other outcome?

• A) 0
• B) 0.25
• C) 0.5
• D) 0.75
• E) 1.0

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Definitions:

Projected Cost Savings

An estimate of the reduction in costs expected to be achieved in future periods through specific actions or initiatives.

Informal Report

A less structured report, often shorter and used for internal purposes, to communicate within an organization without strict adherence to formalities.

Survey Results

The data or outcomes gathered from the administration of a questionnaire to a sample of respondents.

Feasibility Report

A study conducted to assess the practicality and potential success of a proposed project or system.