You are a hotel manager considering four projects that yield different payoffs, depending upon whether there is an economic boom or a recession. The potential payoffs and corresponding payoffs are summarized in the following table. ProjectBoom (50%)Recession (50%)A$40-$20B-$10$30C$50-$50D$60$60Which project has the highest variance?
A. A
B. B
C. C
D. D
Answer: C
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The table above gives the demand schedule for peas. Which of the following statements CORRECTLY describes the price elasticity of demand?
A) The price elasticity of demand is larger at point A than at point B. B) The price elasticity of demand is larger at point D than at point A. C) The price elasticity of demand is constant because the slope is constant. D) The price elasticity of demand increases moving from point A to point B to point C to point D to point E.
In the above figure, if the price is P1, the firm maximizes its profit by producing
A) nothing. B) where MC equals ATC. C) where MC equals P1. D) where ATC equals P1.
After an excise tax is imposed on a good or service,
a. the equilibrium price and quantity are unchanged b. firms must charge a higher price for any particular quantity c. firms must charge a lower price for any particular quantity d. the equilibrium price and quantity will both increase e. the equilibrium price and quantity will both decrease
A foreign-exchange contract that is an agreement between two parties to buy or sell a particular currency at a particular price at a particular date as specified in a standardized contract to all participants in the specified market is known as a(n) ________.
A) spot contract B) forward contract C) futures contract D) equity currency contract