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CIMA Exam CIMAPRO19-P02-1 Topic 8 Question 74 Discussion

Actual exam question for CIMA's CIMAPRO19-P02-1 exam
Question #: 74
Topic #: 8
[All CIMAPRO19-P02-1 Questions]

A manager must decide which one of three projects should be implemented. For each project the possible outcomes and their associated probabilities can be estimated reliably. The manager has decided to make the decision based solely on which project has the highest expected value of profit.

Which of the following statements are correct?

Select ALL that apply.

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Suggested Answer: A

by Thaddeus at Sep 03, 2023, 10:24 AM

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Gaynell
1 months ago
Wait, the manager can't just flip a coin to decide? Where's the fun in that?
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Louvenia
1 months ago
What, no option for 'Throw a dart at the projects and see which one it hits'? That's a classic decision-making strategy!
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Elly
1 months ago
The manager is making a decision under uncertainty, not risk. So option C is incorrect. E is the right answer here.
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Emilio
3 days ago
A) The manager will select the project with the lowest standard deviation.
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Lenna
2 months ago
Haha, selecting the project with the highest possible outcome? That's like choosing the lottery ticket with the biggest jackpot. Option D is a bit too risky, don't you think?
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Isaac
18 days ago
Stefanie: So, maybe option E is the best choice then.
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Mariann
26 days ago
User 3: I think the manager should be risk neutral in this decision.
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Stefanie
1 months ago
User 2: Yeah, I think it's better to consider the standard deviation as well.
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Elden
2 months ago
User 1: I agree, choosing the project with the highest possible outcome seems risky.
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Cyril
2 months ago
Wait, why would the manager choose the project with the lowest standard deviation? That's not what the question is asking for. Option A is clearly wrong.
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Leonardo
30 days ago
User 2: The decision is characterized by risk and the manager is risk neutral.
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Leah
2 months ago
User 1: The manager will select the project with the highest expected value of profit.
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Darrel
2 months ago
But what about the standard deviation? Shouldn't the manager also consider that to assess the risk involved?
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Sylvia
2 months ago
I agree with you, Johnna. It makes sense to go for the project that will bring in the most profit.
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Johnna
2 months ago
I think the manager will select the project with the highest expected value of profit.
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King
2 months ago
Hmm, the manager should focus on maximizing expected value, not minimizing risk. Option E seems the most appropriate.
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Van
20 days ago
So, the manager is risk neutral in this decision-making process.
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Chu
30 days ago
No, the manager will select the project with the highest possible outcomes, not the lowest standard deviation.
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Antonio
1 months ago
But what about the standard deviation of the projects? Shouldn't that also be considered?
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Lacey
1 months ago
I agree, option E is the best choice when maximizing expected value.
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