In Regard to Decision Making, Which of the Following Statements

question 66

Multiple Choice

In regard to decision making, which of the following statements reflects what research has found?

• A) Individuals acting alone always make better decisions than groups.
• B) Group decisions are seldom better than individual decisions.
• C) Groups tend to be less productive than the best individuals working on any specific project.
• D) Groups make better decisions than most individuals acting alone.
• E) There has not been any research showing that either individuals acting alone or groups make better-quality decisions.

Differentiate between the certainty of returns in various financial instruments (e.g., Treasury bills versus risky assets).

Recognize the distinction between investors and gamblers in terms of risk premium requirements.

Calculate and understand the importance of reward-to-volatility ratio, excess return, compounded annual growth rates (CAGR), and holding period returns.

Formulate and analyze complete portfolios combining risk-free and risky assets to maximize utility.

---

Definitions:

Marginal Cost

The expense associated with manufacturing an extra unit of a product.

Marginal Benefits

The extra advantages or utilitarian value derived from consuming an additional unit of a product or service, highlighting consumer preferences.

Net Benefit

The total positive effects of a decision or action minus the total costs associated with it.

Crime-Control Program

Initiatives or strategies implemented to reduce the incidence of crime and increase public safety.