Brett Is Trying to Decide Which Graduate Schools He Will

question 295

Multiple Choice

Brett is trying to decide which graduate schools he will apply to.He is making up a list of all the positive and negative aspects he feels are associated with 100 different schools,and he plans to send applications to the 10 schools that score the highest when he adds up all the positive points and subtracts all the negative points.The decision strategy that Brett is using is referred to as

• A) a purely additive strategy.
• B) elimination by aspects.
• C) a holistic strategy.
• D) an expected value strategy.

---

Definitions:

Asset Beta

A measure of the risk of a firm's assets without the impact of debt, used to estimate the cost of equity in the capital asset pricing model (CAPM).

Standard Deviation

A measure of the amount of variation or dispersion of a set of values.

Systematic Risk

The risk inherent to the entire market or market segment, which cannot be mitigated through diversification. Also known as market risk or undiversifiable risk.