In Figure Below, What Is True About the Two Jobs

question 132

Multiple Choice

In figure below, what is true about the two jobs?

• A) Job 1 has a larger standard deviation than Job 2.
• B) All outcomes in both jobs have the same probability of occurrence.
• C) A risk-averse person would prefer Job 2.
• D) A risk-neutral person would prefer Job 1.
• E) Job 1 has the same expected income as Job 2.

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Definitions:

Price Variance

The difference between the actual cost of a good or service and its planned or standard cost, indicating how effectively resources are being used.