Exhibit 14.7 The Following Questions Use the Information Below

question 120

Multiple Choice

Exhibit 14.7
The following questions use the information below.
A decision maker is faced with two alternatives. The decision maker has determined that she is indifferent between the two alternatives when p = 0.45.
-Refer to Exhibit 14.7. What is the decision maker's certainty equivalent for this problem?

• A) −$15,000
• B) $84,000
• C) $56,100
• D) $82,000

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Definitions:

Skin Conductance

A measure of the electrical conductance of the skin, which varies with its moisture level and is used as an indicator of psychological or physiological arousal.

Primary Control

The ability to directly influence one's environment or circumstances to bring about desired outcomes.

Job Stress

The harmful physical and emotional responses that occur when the requirements of a job do not match the capabilities, resources, or needs of the worker.

Corporate Managers

Individuals in charge of directing and overseeing the operations and strategies of corporations.