Refer to the Information Provided in Figure 17

question 34

Multiple Choice

Refer to the information provided in Figure 17.2 below to answer the question(s) that follow. Figure 17.2
-Refer to Figure 17.2. Sam has two job offers when he graduates from college. Sam views the offers as identical, except for the salary terms. The first offer is at a fixed annual salary of $60,000. The second offer is at a fixed salary of $30,000 plus a possible bonus of $60,000. Sam believes that he has a 50-50 chance of earning the bonus. If Sam takes the offer that maximizes his expected utility and is risk-neutral, which job offer will he choose?

• A) Sam will take the first offer.
• B) Sam will take the second offer.
• C) Sam is indifferent between the offers-both yield the same expected utility.
• D) Indeterminate from the given information.

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Definitions:

Confidential

Information or material meant to be kept secret or private between included parties.

Financial Status

The condition of one's financial health, often evaluated by income, expenses, debt, and assets.

Pitch

The act of clearly presenting and describing a product or service to others.

Confident Speaker

An individual who is self-assured and articulate in public speaking situations, able to effectively convey messages to an audience.