A Manager Is Attempting to Assess the Probability of a Recession

question 10

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 75 percent chance the recession will end in six months and profits will return to $400 million.However,there is a 25 percent chance the recession will not end in six months,resulting in a $5 million loss.The standard deviation of profits over the next six months is:

• A) $175.37million.
• B) $320.18 million.
• C) $286.39 million.
• D) $0 million.

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Definitions:

Two-Sided Argument

A persuasion strategy that presents both the advantages and disadvantages of a particular stance or product, enhancing credibility by acknowledging both perspectives.

Chunking

A method of breaking down large pieces of information into smaller, more manageable units (chunks) to improve memory and recall.

Utilitarian Aspects

Features of a product or service that offer practical or functional benefits to the user.

Fear Appeals

Marketing messages that evoke fear to motivate consumers to engage in a desired behavior, often used in public health campaigns.