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CIMAPRO19-P01-1 Exam - Topic 3 Question 129 Discussion

Company LGF seeks to maximize profits and has a 'risk seeker' attitude when making decisions. The company has to choose between mutually exclusive projects. A range of possible profit outcomes has been estimated for each project along with their associated probabilities.Company LGF would choose the project with the:
A) Best possible outcome irrespective of the standard deviation.
B) Highest expected value irrespective of the standard deviation.
C) Highest standard deviation irrespective of the best possible outcome.
D) Highest standard deviation irrespective of the expected value.

CIMAPRO19-P01-1 Exam - Topic 3 Question 129 Discussion

Actual exam question for CIMA's CIMAPRO19-P01-1 exam
Question #: 129
Topic #: 3
[All CIMAPRO19-P01-1 Questions]

Company LGF seeks to maximize profits and has a 'risk seeker' attitude when making decisions. The company has to choose between mutually exclusive projects. A range of possible profit outcomes has been estimated for each project along with their associated probabilities.

Company LGF would choose the project with the:

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Suggested Answer: A

by Armando at Jun 28, 2026, 08:45 AM

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Mitsue
I’m leaning towards A, but I’m not confident. It’s tricky because the best outcome doesn’t always mean it’s the most profitable overall.
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Jesusa
5 days ago
I feel like they might choose the project with the highest standard deviation because they’re risk seekers. But then again, does that really maximize profits?
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Roxane
10 days ago
I remember a practice question where we had to choose based on expected value too. It seems like B makes the most sense, but I could be wrong.
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Xuan
15 days ago
I think LGF would go for the highest expected value since they want to maximize profits, but I'm not entirely sure how the risk-seeking attitude plays into that.
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