I You Are Trying to Decide in Which of the Three

question 16

Multiple Choice

I You are trying to decide in which of the three companies you should invest. Refer to the following Payoff Table. If the market rises in the next year, which of the following statements are correct?
i. The Opportunity Loss for Company A is $200.
ii. The Opportunity Loss for Company B is $200.
ii. The Opportunity Loss for Company C is $700.

• A) (i), (ii), and (iii) are all correct statements.
• B) (i) is a correct statement but not (ii) or (iii).
• C) (ii) is a correct statement but not (i) or (iii).
• D) (ii) and (iii) are correct statements but not (i).
• E) (i), (ii), and (iii) are all false statements.

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Definitions:

Surety Agreement

A legal contract where one party (the surety) guarantees the performance, obligations, or debts of another party (the principal) to a third party (the obligee).

Auto

Short for automobile, referring to any self-propelled vehicle used for transportation on public roads.

Credit

The provision of resources (such as money, goods, or services) by one party to another, with the expectation that the second party will repay the first party at a later date.

Pledge

A promise or agreement to do something, often backed by an assurance in the form of property or rights as a security for the fulfillment of an obligation.