Multiple Choice
A firm is making production plans for next quarter,but the manager does not know what the price of the product will be next month.She believes there is a 30 percent chance price will be $500 and a 70 percent chance price will be $750.The four possible profit outcomes are: 
Which option has the highest absolute) risk?
A) Option A is riskier than Option B.
B) Option B is riskier than Option A.
C) Both options have the level of risk if the manager is risk averse.
D) cannot calculate risk with the given information
Correct Answer:
Verified
Correct Answer:
Verified
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