Harry,a Manager at Pine and Acorn Consultancy,needs to Make a Decision

question 76

Multiple Choice

Harry,a manager at Pine and Acorn Consultancy,needs to make a decision on a new service that his group is planning to launch.Though it carries substantial risk of failure,this service has the potential of generating huge revenues if successful.The decision that Harry needs to take in this context can be best categorized as a _____ decision.

• A) satisficing
• B) maximin
• C) risk-averting
• D) transactional
• E) nonprogrammed

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Definitions:

Interest Rate

The percentage charged on the total amount borrowed or earned on the total amount saved or invested.

Informationally Efficient

A characteristic of markets where all available information is already reflected in the prices of assets, ensuring that no participant can achieve consistent excess returns.

Fundamental Analysis

A method of evaluating a security by attempting to measure its intrinsic value, involving examination of related economic and financial factors.

Moral Hazard

The situation in which one party is more likely to take risks because another party bears the cost of those risks.