Mel Is Thinking of Going on a Cruise

question 33

Multiple Choice

Mel is thinking of going on a cruise. Mel values a cruise in nice weather at $2,000 and values a cruise in bad weather at $50. The probability of nice weather is 60 percent and the probability of bad weather is 40 percent. Trip insurance is sometimes available. If purchased, it allows travelers to delay the cruise until the weather is nice. If Mel is risk-neutral, then in the absence of trip insurance, the most she will be willing to pay for the cruise is:

• A)$1,200.
• B)$1,250.
• C)$1,220.
• D)$1,000.

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Definitions:

Valid Observation

An observation that accurately reflects the phenomenon it is intended to represent, providing reliable data.

Cross-Cultural Issues

Concerns or challenges that arise due to differences in cultural norms, values, and practices among various groups.

Reliability

The stability and consistency in the outcomes provided by a measuring tool over successive time periods.

Two Raters

A method involving two independent evaluators assessing the same performance or work to improve the objectivity and reliability of the evaluation.