Use the Following to Answer Questions

question 77

Multiple Choice

Use the following to answer questions:
Scenario: Diversification
Morris is considering investing $10,000 in a sunglass company or a rain poncho company. If it is a rainy year and he invests only in the sunglass company, he will lose $5,000. However, if it is a rainy year and he invests only in the rain poncho company, he will earn $10,000. If it is a sunny year and he invests only in the sunglass company, he will earn $10,000; if he invests only in the rain poncho company, he will lose $5,000 in a sunny year. There is a 50% chance of a sunny year and a 50% chance of a rainy year.
-(Scenario: Diversification) Look at the scenario Diversification. If Morris invests all of his money in the sunglass company, what is his expected gain or loss?

• A) a loss of $2,500
• B) to break even
• C) a gain of $2,500
• D) a gain of $10,000

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Definitions:

Suppliers

Companies or individuals that provide goods or services to other businesses, often playing a crucial role in a supply chain.

Internal Analysis

Examination of an organization's internal environment, including its resources, capabilities, and systems, to assess strengths and weaknesses.

Strategic Decision Makers

Individuals or groups within an organization responsible for making high-level choices that significantly affect the company’s direction, objectives, and overall performance.

Organizational Skills

The ability to use one's time, energy, and resources effectively to achieve goals and meet deadlines in a professional setting.