Which of the Following Is an Example of a Situation

question 48

Multiple Choice

Which of the following is an example of a situation in which the law of large numbers does not apply to the expected-value decision principle?

• A) The investment decision is a once-in-a-lifetime opportunity.
• B) Average return expected of a project is low.
• C) The project requires a series of investments over the years.
• D) Average return expected of a project is high.

---

Definitions:

Boxplot

A graphical representation of data points that displays the distribution's quartiles, median, and potential outliers.

Five-Number Summary

A concise statistical summary comprising the minimum, first quartile, median, third quartile, and maximum of a data set.

Stem-and-Leaf Plot

A graphical representation of a data set where each data value is split into a "stem" and a "leaf", allowing for easy visualization of data distribution.

Histogram

A graphical representation of the distribution of numerical data, often used to depict the frequency of data points in successive intervals.