Table 5.4 -Refer to Table 5.4. If Outcomes 1 and 2 Are

question 106

Multiple Choice

Table 5.4

-Refer to Table 5.4. If outcomes 1 and 2 are equally likely at Job A, and if at Job B the $20 outcome occurs with probability .1, and the $50 outcome occurs with probability .9, then:

• A) Job A is safer because the difference in the probabilities is lower.
• B) Job A is riskier only because the expected value is lower.
• C) Job A is riskier because the standard deviation is higher.
• D) Job B is riskier because the difference in the probabilities is higher.
• E) There is no definite way given this information to tell how risky the two jobs are.

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Definitions:

Seafloor Spreading

A geologic process where new oceanic crust is formed at mid-ocean ridges and slowly moves away from the ridge, contributing to continental drift.

Subduction

The process by which one tectonic plate moves under another, sinking into the Earth's mantle.

South Atlantic

The portion of the Atlantic Ocean lying between the eastern coasts of South America and the western coasts of Africa.

Mid-Ocean Ridges

Underwater mountain ranges formed by plate tectonics, where new oceanic crust is created through volcanic activity.