Use the Following to Answer Questions

question 146

Multiple Choice

Use the following to answer questions :
Scenario: Diversification
Morris is considering investing $10 000 in a sunglass company or a rain poncho company.If it is a rainy year and he invests only in the sunglass company,he will lose $5 000.However,if it is a rainy year and he invests only in the rain poncho company,he will earn $10 000.If it is a sunny year and he invests only in the sunglass company,he will earn $10 000;if he invests only in the rain poncho company,he will lose $5 000 in a sunny year.There is a 50% chance of a sunny year and a 50% chance of a rainy year.
-(Scenario: Diversification) Use Scenario: Diversification.If Morris invests all of his money in the sunglass company,what is his expected gain or loss?

• A) a loss of $2 500
• B) to break even
• C) a gain of $2 500
• D) a gain of $10 000

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Definitions:

Modifying Feelings

The process of altering or adjusting one's emotions toward a more desired state.

Display Rules

Cultural or societal norms dictating the appropriate emotional expressions under various circumstances.

Cognitive Empathy

The capacity to understand another person's point of view or mental state without necessarily sharing their emotion or experience.

External Information

Information that originates outside an organization and is used to aid decision-making or strategy planning.