Jasmine Is Considering Buying a 1954 Chevy, Restoring It, and Selling

question 60

Multiple Choice

Jasmine is considering buying a 1954 Chevy, restoring it, and selling it. She calculates a 0.2 probability that she will gain 25% from the project, a 0.3 probability that she will gain 10%, and a 0.5 probability that she will gain 5%. What is Jasmine's expected return?

• A) 18%
• B) 10.5%
• C) 7%
• D) 12%

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Definitions:

Devil's Advocate

A role adopted by an individual in discussions or decision-making processes to present alternative or opposing arguments, aiming to challenge assumptions and promote critical thinking.

Stimulates Controversy

Provokes debate or disagreement on a specific topic due to differing opinions, beliefs, or interests among individuals or groups.

Diffusion Of Responsibility

The ability of group members to share the burden of the negative consequences of a poor decision.

Risky Shifts

Risky shift phenomenon observes that groups tend to make decisions that are riskier than the individual decisions of group members due to the diffusion of responsibility and group influence.