A Firm Is Considering Two Projects,A and B,with the Following

question 52

Multiple Choice

A firm is considering two projects,A and B,with the following probability distributions for profit. $$\begin{array} { c c c } \begin{array} { c } \text { Prafit } \\\text { (\$1,000s) }\end{array} & \begin{array} { c } \text { Praject } A \\\text { Prabability } ( \% ) \end{array} & \begin{array} { c } \text { Project } B \\\text { Prabability } ( \% ) \end{array} \\\hline \$ 20 & 10 & 10 \\40 & 15 & 15 \\60 & 50 & 25 \\80 & 15 & 40 \\100 & 10 & 10\end{array}$$ Given the above,a decision maker using the coefficient of variation rule would

• A)choose project A.
• B)choose project A only if risk averse.
• C)choose project B.
• D)choose project B only if risk loving.
• E)not be able to make a decision using that rule.

---

Definitions:

Measures of Construct

Refers to tools or methods used to assess the presence and strength of theoretical constructs.

Measurement Error

The difference between the observed value and the true value of a variable, often arising from inaccuracies in data collection or processing.

Valid

Refers to the extent to which a concept, conclusion, or measurement is well-founded and corresponds accurately to the real world.

Antiperspirant

A personal care product designed to reduce or prevent sweat and odor by temporarily blocking the sweat glands.