You Are Trying to Decide in Which of the Three

question 16

Multiple Choice

You are trying to decide in which of the three companies you should invest. Refer to the following Payoff Table. If the probability of the market declining in the next year is 0.5, which of the following statements are correct?
i. The Expected value of stock purchased under conditions of certainty is $1,675.
ii. The Expected value of perfect information is $75.
iii. The Expected value of perfect information is $180.

• A) (i), (ii) and (iii) are all correct statements
• B) (i) is a correct statement but not (ii) or (iii).
• C) (ii) is a correct statement but not (i) or (iii).
• D) (iii) is a correct statement but not (i) or (ii).
• E) (i) and (ii) are correct statements but not (iii).

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Definitions:

Addition Polymer

A polymer formed by the successive addition of monomer molecules with unsaturated bonds, such as in polyethylene or polystyrene production.

Condensation Polymer

A type of polymer formed by the reaction of two monomers with the simultaneous elimination of small molecules such as water, resulting in a bond between the monomers.

ε-Caprolactam

A cyclic amide or lactam, used as a monomer in the production of Nylon 6 through ring-opening polymerization.

Nylon 6

A type of polyamide or nylon made from a single monomer, caprolactam, characterized by its long, repetitive chains, used in textile and plastic industries.