You Are Trying to Decide in Which of the Three

question 3

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 Opportunity Loss for Company A is $120.
ii. The Expected Opportunity Loss for Company B is $120.
iii. The Expected Opportunity Loss for Company C 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) (ii) and (iii) are correct statements but not (i).
• E) All statements are false

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Definitions:

Progressive Discipline

A method of dealing with job performance problems that escalates through a series of steps, from verbal warnings to written warnings to suspension and, finally, termination.

Hot-Stove Rule

A management principle comparing the consequences of misconduct to touching a hot stove, implying that discipline should be immediate, consistent, impersonal, and related to the offense.

Peer Review Technique

A method used to evaluate work or performance by one's equals (peers) to ensure quality, accuracy, or compliance with standards.

Hot-Stove Rule

A management principle suggesting that discipline should be immediate, clear, consistent, and impartial, similar to touching a hot stove.