Exhibit 14.5 The Following Questions Are Based on the Information Below

question 8

Multiple Choice

Exhibit 14.5
The following questions are based on the information below.
An investor is considering 4 investments, A, B, C, D. The payoff from each investment is a function of the economic climate over the next 2 years. The economy can expand or decline. The following decision tree has been developed for the problem. The investor has estimated the probability of a declining economy at 40% and an expanding economy at 60%.
-Refer to Exhibit 14.5. What is the correct decision for this investor based on an expected monetary value criterion?

• A) A
• B) B
• C) C
• D) D

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Definitions:

Minimum Data Set (MDS)

A standardized, primary screening and assessment tool of health status that forms the foundation of the comprehensive assessment for all residents in long-term care facilities.

Federal Law

Legislation passed by the national government of a country, which applies to all its regions and citizens.

Long-Term Care Facility

A facility that provides a variety of services, including medical and personal care, to people who are unable to live independently.

Occurrence Reports

Documentation used in healthcare settings to report incidents, errors, or unusual events for quality improvement.