Exhibit 14.8 The Following Questions Use the Information Below

question 33

Multiple Choice

Exhibit 14.8
The following questions use the information below.
A company needs to buy a new insurance policy. They have three policies to choose from, A, B and C. The policies differ with respect to price, coverage and ease of billing. The company has developed the following AHP tables for price and summary. The other tables are not shown due to space limitations.
-Every nonprobabilistic method has a weakness for decision making. Which of the following is incorrect regarding a method and its weakness?

• A) The maximax method ignores potentially large losses.
• B) The maximin method ignores potentially large payoffs.
• C) The minimax regret method can lead to inconsistent decisions.
• D) All of these are correct.

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Definitions:

Adaptation

The evolutionary process by which organisms become better suited to their environment, leading to changes in traits over generations.

Hollow Bones

Bones that are light yet strong, characteristic of birds, aiding in flight by reducing overall weight.

Bird

Endothermic reptile that has feathers and wings, is often adapted for flight, and lays hard-shelled eggs.

Homeostasis

The ability of an organism to maintain stable internal conditions despite changes in external environments.