What Is the Expected Payoff of an Investment That Yields

question 17

Multiple Choice

What is the expected payoff of an investment that yields $1,000,000 with a probability of 0.001 and $0 with a probability of 0.999?

• A) $1,000,000
• B) $1,000
• C) $10,000
• D) $500,000

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Definitions:

Geographic Departmentation

An organizational structure where departments or teams are formed based on geographical regions, facilitating focus on local preferences and operational needs.

Product Departmentation

The organizational practice of structuring teams or departments based on different products or product lines within a company.

Customer Departmentation

Relatively self-contained units deliver an organization’s products or services to specific customer groups.

Departmentation

involves the division of an organization into separate departments or units, each managing specific functions or tasks.