You Are Responsible for Purchasing 20 Used Computers for Your

question 346

Multiple Choice

You are responsible for purchasing 20 used computers for your company. Red brand computers cost $1,250 and green brand computers cost $1,800. Based on experience, you believe that 60% of red brand computers are lemons (low quality) while 20% of green brand computers are lemons (low quality) . You are willing to pay $1,000 for a known lemon and $2,000 for a known plum. Which brand do you purchase?

• A) red
• B) green
• C) You are indifferent between brands.
• D) You don't buy either brand.

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Definitions:

Short Interest

A financial metric indicating the quantity of a company's shares that are currently sold short and have not yet been covered or closed out.

Indicator

A variable or metric used to provide insights into the state or trends of economic or financial activity.

Housing Bubble

A market condition characterized by rapid increases in property prices to levels unsustainable in the long term, leading to a sharp decline.

Financial Crisis

A significant disruption in the flow of funds in financial markets, characterized by sharp declines in asset prices and firm failures.