What Method of Probability Assessment Would Most Likely Be Used

question 95

Multiple Choice

What method of probability assessment would most likely be used to assess the probability that a major earthquake will occur in California in the next three years?

• A) Classical probability based on the ratio of the number of ways the event can occur
• B) Relative frequency based on previous history
• C) Subjective probability based on expert opinion
• D) Independent probability based on two unrelated outcomes

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Definitions:

Investment

Allocation of capital or resources to assets with the expectation of generating profit or income.

Required Rate

The minimum acceptable return on an investment deemed necessary by an investor or business.

Investment Project

An undertaking that involves allocating resources like capital and labor to generate financial returns or achieve strategic goals.

Payback Method

A capital budgeting technique that estimates the time required to recoup the initial investment in a project.