Which of the Following Statements Is Correct

question 14

Multiple Choice

Which of the following statements is correct?

• A) A complete probability distribution is always an objective listing of all possible events.Since it is impossible to list all the possible outcomes from a single event,probability distributions are of limited benefit in assessing risk.
• B) A peaked probability distribution centered around the expected value will make a stock more desirable,thereby increasing its expected return.
• C) In the real world,there are an infinite number of possible states or outcomes that can occur.Thus,probability distributions actually are continuous;however,for simplicity,financial managers typically reduce the number of states for analysis to a manageable number.
• D) Risk refers to the chance that some unfavorable event will occur while a probability distribution is completely described as a listing of the likelihood of unfavorable events.
• E) The higher the probability that the return from an investment will pay off its average promised value the lower will be the expected return,regardless of the distribution of the investment's returns.

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Definitions:

Market Segmentation

The activity of dividing a broad consumer or business market into sub-groups of consumers or segments, based on some type of shared characteristics.

Micro Variable

A Micro Variable is a specific, individual factor that can influence outcomes within a limited context, often used in analyzing economic, financial, or behavioral trends on a small scale.

Purchasing Approaches

Purchasing approaches are strategies and methodologies that organizations use to acquire goods and services in the most effective manner.

Market Segmentation

The process of dividing a market into distinct groups of buyers with different needs, characteristics, or behaviors that might require separate products or marketing strategies.