A Manager Is Attempting to Assess the Probability of a Recession

question 7

Multiple Choice

A manager is attempting to assess the probability of a recession ending in the next six months and its impact on expected profitability.The manager believes there is a 33 percent chance the recession will end in six months and profits will return to $100 million.However,there is a 67 percent chance the recession will not end in six months,resulting in a $7 million loss.The standard deviation of profits over the next six months is:

• A) $50.31 million.
• B) $57.40 million.
• C) $28.31 million.
• D) $0 million.

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Definitions:

Cherokee

A Native American people originally from the southeastern United States, forced to relocate to Oklahoma via the Trail of Tears during the 1830s.

Georgia

A state in the southeastern United States, established as a British colony in 1732, known for its diverse geography from beaches to mountains.

Cotton Growers

Individuals or entities involved in the cultivation of cotton plants, which is a significant agricultural activity in regions with suitable climates for this crop.

White Miners

Refers to the labor force comprising predominantly of white individuals working in the mining industry, often associated with historical mining operations in various parts of the world.