Scenario 5.1: Aline and Sarah Decide to Go into Business Together as Together

question 149

Multiple Choice

Scenario 5.1:
Aline and Sarah decide to go into business together as economic consultants. Aline believes they have a 50-50 chance of earning $200,000 a year, and that if they don't, they'll earn $0. Sarah believes they have a 75% chance of earning $100,000 and a 25% chance of earning $10,000.
-Refer to Scenario 5.1. The probabilities discussed in the information above are:

• A) objective because they are single numbers rather than ranges.
• B) objective because they have been explicitly articulated by the individuals involved.
• C) objective because the event hasn't happened yet.
• D) subjective because the event hasn't happened yet.
• E) subjective because they are estimates made by individuals based upon personal judgment or experience.

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Definitions:

Large-company Stocks

Shares of large capitalization companies, often known for their stability and paying dividends.

Treasury Bills

Short-term government securities issued at a discount from the face value and mature in a year or less.

Frequency Distribution

A statistical representation showing the number of occurrences of each distinct value in a dataset.

Large-company Stocks

Shares that represent ownership in large, well-established companies typically having a high market capitalization.