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Scenario II Scenario II Is Based on and Presents Results Consistent with Consistent

question 5

Multiple Choice

Scenario II
Scenario II is based on and presents results consistent with the following study:
Bechara, A., Damasio, H., Tranel, D., & Damasio, A. R. (1997) . Deciding advantageously before knowing the advantageous strategy. Science, 275(5304) , 1293-1295. doi:10.1126/science.275.5304.1293
Bechara et al. (1997) studied risky decision making on a gambling task in patients with brain damage in an area critically involved in executive functions such as planning and decision making. They compared this performance with the performance of control participants without brain damage. All participants were given a starting bankroll of $2,000 in facsimile dollars. In the baseline condition, participants chose cards from among four decks. Selecting cards from Decks A and B sometimes resulted in a win of $100. Selecting cards from Decks C and D sometimes resulted in a win of $50. No losses were incurred in this condition. In the subsequent experimental condition, however, some cards in all decks produced losses. The losses in Decks A and B were large and occurred frequently enough to possibly result in bankruptcy. The losses in Decks C and D were considerably smaller. Bechara et al. measured deck selection and the galvanic skin response (GSR) both prior to (anticipatory) and after (post-outcome) turning over each card.
In the baseline condition, all participants in both groups showed a clear preference for Decks A and B. Both groups showed small but reliable anticipatory and post-outcome GSRs. In the experimental condition, with continued play the controls exhibited a clear preference for Decks C and D, while the patients continued to play more from Decks A and B. Relative to the baseline condition, controls exhibited a much larger anticipatory GSR prior to each decision whereas the patients' anticipatory GSR was small and similar to that obtained under the baseline condition. The post-outcome GSRs were similar in the two groups and occurred to both wins and losses.
Interestingly, the investigator systematically interrupted play during the experimental condition and asked all participants if they had developed a game strategy. With continued play, most of the control participants labeled Decks A and B as "the bad decks." Among the patients with brain damage, only half eventually labeled Decks A and B as "the bad decks." Remarkably, in both groups this realization did not affect game play. The minority of the control group who did not express a negative opinion about Decks A and B nevertheless tended to avoid those decks. Similarly, the patients who acknowledged that Decks C and D were risky nevertheless preferred those decks.
-(Scenario II) What can be accurately inferred from Scenario II?

Definitions:

Discount Period

The time interval between when a bill of exchange is issued and its payment date, during which the bill is sold at a discount from face value.

2/10, Net 30

A common credit term indicating that a buyer can take a 2% discount on the invoice price if payment is made within 10 days, otherwise, the full invoice amount is due in 30 days.

Accruals

Adjustments in accounting for income that has been generated but not yet documented, and for costs that have been accrued but not yet documented.

Working Capital Needs

The funds required to finance the day-to-day operations of a business, including managing its short-term assets and liabilities.