Lola Is in the Process of Forecasting the Sales Growth

question 7

Multiple Choice

Lola is in the process of forecasting the sales growth rate for an early-stage venture specializing in the production of durable running shoes. Lola predicts a .2 probability of an 80% growth in sales, a .3 probability of a 60% growth in sales, a .4 probability of a 40% growth in sales, and a .1 probability of a 10% decrease in sales. What is the expected sales growth rate of the venture?

• A) 47%
• B) 49%
• C) 51%
• D) 53%

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Definitions:

Non-Random Sample

A sample that is not drawn from a population using random methods, potentially leading to biases.

Validity

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

Drive-Reduction Theory

A theory that explains motivation as being based on the goal of eliminating uncomfortable states.

Clark Hull

An American psychologist known for his drive reduction theory, which suggests that human motivation arises from the desire to reduce drives like hunger or thirst.