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Which of the Following Statements Is Likely to Be Correct

Question 91

Multiple Choice

Which of the following statements is likely to be correct for a decision tree which indicates a 30 percent chance of making a $250,000 profit and a 70 percent chance of sustaining a $140,000 loss?


A) The decision should be "yes" whenever the amount of possible profit exceeds the amount of possible loss
B) The decision should be "no" whenever there is a possibility of loss
C) The expected value is positive before discounting
D) The expected value is negative before discounting

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