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

question 9

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 who is risk neutral would

• A)choose project A.
• B)choose project B.
• C)not be able to make a decision.
• D)change probabilities because no decision maker is ever risk neutral.

---

Definitions:

Modify Schema

The process of adjusting or changing one's framework of knowledge to incorporate new information.

Ethnic Groups

Groups of people who identify with each other based on shared cultural characteristics, ancestry, or historical past.

Cultural Heritage

The legacy of physical artifacts and intangible attributes of a group or society inherited from past generations, preserved in the present, and bestowed for the benefit of future generations.

Phallic Stage

A phase in Freudian psychosexual development, occurring roughly between the ages of three and six, where the libido's focus is on the genital area.