CIMAPRO19-P01-1 Exam - Topic 9 Question 104 Discussion

Actual exam question for CIMA's CIMAPRO19-P01-1 exam

Question #: 104
Topic #: 9

The following extract from a decision tree has been prepared for a decision that is to be made to choose between options P, Q and R.

What is the maximum expected value of profit at decision point Z?

A$4 million

B$6 million

C$36 million

D$2.4 million

Show Suggested Answer

Suggested Answer: C

References:

by Chau at Dec 06, 2024, 08:48 AM

Limited Time Offer

25%

Off

Get Premium CIMAPRO19-P01-1 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Renay

6 months ago

Totally agree, $6 million feels like the right choice!

upvoted 0 times

...

Delmy

6 months ago

Wait, how can it be $2.4 million? That seems off.

upvoted 0 times

...

Terina

6 months ago

$4 million seems reasonable based on the tree.

upvoted 0 times

...

Natalya

7 months ago

Definitely not $36 million, that's way too high!

upvoted 0 times

...

Milly

7 months ago

I think the max expected value is $6 million.

upvoted 0 times

...

Aliza

7 months ago

I think the answer might be $6 million, but I’m not completely confident. I remember something about weighing the outcomes based on their probabilities.

upvoted 0 times

...

Rex

7 months ago

I feel like I might be overthinking this. Is the maximum expected value just the highest profit listed, or do I need to calculate it?

upvoted 0 times

...

Ressie

8 months ago

This question seems similar to one we did in class about maximizing profits. I think I need to focus on the probabilities given for each option.

upvoted 0 times

...

Blondell

8 months ago

I remember we practiced decision trees, but I’m not sure how to calculate the expected values for each option here.

upvoted 0 times

...

Rhea

8 months ago

I've got this! Decision trees are my specialty. I can quickly crunch the numbers and identify the option with the highest expected value.

upvoted 0 times

...

Tatum

8 months ago

Okay, let's think this through step-by-step. I'll start by calculating the expected value for each option, then compare them to find the maximum.

upvoted 0 times

...

Izetta

8 months ago

Hmm, I'm a bit unsure about this one. The decision tree has multiple branches and probabilities to consider. I'll need to double-check my work to make sure I'm not missing anything.

upvoted 0 times

...

Shenika

8 months ago

This looks like a straightforward decision tree problem. I'll carefully analyze the probabilities and expected values to determine the maximum expected value at decision point Z.

upvoted 0 times

...

Nickolas

1 year ago

Wait, are we sure the decision tree isn't upside down? That would really throw a wrench in things. I'm going to go with option B just to be safe.

upvoted 0 times

Stephanie

12 months ago

User 3: Option B sounds good to me too. Let's go with that.

upvoted 0 times

...

Lavonne

12 months ago

User 2: I agree, let's stick to the options given. I choose option B.

upvoted 0 times

...

Kami

1 year ago

User 1: I think the decision tree is correct, let's not worry about it being upside down.

upvoted 0 times

...

Daren

1 year ago

Ah, the old 'maximum expected value' question. I bet the exam writers have a sense of humor, hiding the answer in plain sight like that.

upvoted 0 times

Kimbery

12 months ago

C) $36 million

upvoted 0 times

...

Denny

12 months ago

B) $6 million

upvoted 0 times

...

Michael

12 months ago

A) $4 million

upvoted 0 times

...

Theola

1 year ago

This is a tricky one. I think I need to go back and review my decision tree concepts. The answer might be more complicated than it seems at first glance.

upvoted 0 times

Werner

12 months ago

I'm not sure, but I think it could be B) $6 million.

upvoted 0 times

...

Christa

12 months ago

B) $6 million

upvoted 0 times

...

Vannessa

12 months ago

I think the answer might be A) $4 million.

upvoted 0 times

...

Augustine

1 year ago

A) $4 million

upvoted 0 times

...

Regenia

1 year ago

I'm not sure how they came up with $36 million. The values at the endpoints are $4 million, $6 million, and $2.4 million, so shouldn't the answer be one of those?

upvoted 0 times

...