You Are Trying to Decide in Which of the Three

question 35

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 0.4, which of the following statements are correct?
i. The Expected value of stock purchased under conditions of certainty is $1,980.
ii. The Expected value of stock purchased under conditions of certainty is $120.
iii. The Expected value of stock purchased under conditions of certainty is $440.

• 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) All statements are false

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Definitions:

Mutual Agency

A principle of partnership where each partner has the authority to bind the partnership in contractual agreements.

Ease of Formation

Refers to the simplicity and straightforwardness involved in establishing a new business or organization.

Revenue per Employee

Is a financial metric used to measure the average revenue generated by a company per employee, indicating the efficiency and productivity of its workforce.

LLC Efficiency

The effectiveness with which a Limited Liability Company (LLC) uses its resources to achieve its business goals, potentially distinct from broader company efficiency metrics.