Suppose a Family Has Saved Enough for a 10 Day

question 22

Multiple Choice

Suppose a family has saved enough for a 10 day vacation (the only one they will be able to take for 10 years) and has a utility function U = V^1/2 (where V is the number of healthy vacation days they experience) .Suppose they are not a particularly healthy family and the probability that someone will have a vacation-ruining illness (V = 0) is 20%.What is the expected value of V?

• A)10
• B)8
• C)2
• D)0

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Definitions:

Technological Synergy

The phenomenon where the interaction or cooperation of two or more technologies produce a combined effect greater than the sum of their separate effects.

Strategic Management

The process of setting goals, conducting analyses, making decisions, and implementing strategies in an organization to achieve its long-term objectives.

Scenario Analysis

A process of analyzing possible future events by considering alternative possible outcomes or scenarios.

Strategic Planning

Strategic planning involves determining the course an organization will take and deciding how to allocate resources, such as money and personnel, to follow that path.