TABLE 19-6 a Student Wanted to Find Out the Optimal Strategy to Strategy

question 210

Multiple Choice

TABLE 19-6
A student wanted to find out the optimal strategy to study for a Business Statistics exam. He constructed the following payoff table based on the mean amount of time he needed to study every week for the course and the degree of difficulty of the exam. From the information that he gathered from students who had taken the course, he concluded that there was a 40% probability that the exam would be easy.

-Which of the following is not a decision making criterion?

• A) Maximizing the expected monetary value of an action
• B) Minimizing the expected opportunity loss of an action
• C) Minimizing expected profit under certainty
• D) Maximizing the return-to-risk ratio

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Definitions:

Inventory

Goods and materials that a business holds for the ultimate goal of resale or processing in the production process.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair market value of its net assets, representing future economic benefits from unidentifiable assets.

Consolidation

The process in businesses where the financial statements of several departments or subsidiaries are combined to present as those of a single entity.

Previous Business Combination

Refers to a merger or acquisition that has occurred in the past where two or more entities combined to form a single entity.