Exhibit 14.5 The Following Questions Are Based on the Information Below

question 37

Multiple Choice

Exhibit 14.5
The following questions are based on the information below.
An investor is considering 4 investments, A, B, C, D. The payoff from each investment is a function of the economic climate over the next 2 years. The economy can expand or decline. The following decision tree has been developed for the problem. The investor has estimated the probability of a declining economy at 40% and an expanding economy at 60%.
-The scores in a scoring model can be thought of as subjective assessments of

• A) usefulness.
• B) worthiness.
• C) utility.
• D) payoff.

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Definitions:

U.S. Households

Pertains to living units in the United States where individuals or groups of people reside, commonly forming a family or household unit.

1970

A year marked by significant global and national events, considered part of the late 20th century historical context.

Dual-Income Families

Households in which both partners earn income from employment, becoming increasingly common in modern societies.

Paid Family Leave

An employee benefit that provides paid time off work to care for a family member or for childbirth or adoption.