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

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.
A) The manager will select the project with the lowest standard deviation.
B) The range of possible outcomes for each project is not important to the manager.
C) The decision is characterized by uncertainty and the manager is risk seeking.
D) The manager will select the project with the highest of all of the possible outcomes.
E) The decision is characterized by risk and the manager is risk neutral.

CIMAPRO19-P02-1 Exam - 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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Mindy
8 months ago
E makes sense, risk neutral is the way to go in this scenario!
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Jamika
8 months ago
Wait, how can the manager be risk seeking if they're just focusing on expected value?
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Caren
8 months ago
I think the range of outcomes does matter, so B seems off.
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Rima
9 months ago
Totally agree, option A is definitely incorrect!
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Kris
9 months ago
The manager is looking for the highest expected value, not the lowest standard deviation.
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Myrtie
9 months ago
I feel like the manager should be risk neutral if they're just looking at expected value, but I could be wrong about that.
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Sanjuana
9 months ago
I practiced a similar question where the manager was risk-averse, so I'm a bit confused about the risk-seeking part here.
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Brittney
9 months ago
I think the range of outcomes matters, especially since the manager is focusing on expected value.
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Daniela
9 months ago
I remember discussing expected value in class, but I'm not sure if the manager will really pick the project with the lowest standard deviation.
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Tashia
9 months ago
Okay, this seems straightforward. The manager is looking to maximize expected profit, so I'll need to calculate the expected value for each project and choose the one with the highest.MikeS: Hmm, I'm a bit confused about the difference between uncertainty and risk here. Is the manager risk-seeking or risk-neutral? That could impact the decision.SarahP: I think the key is to focus on the expected value, not the range of possible outcomes or the standard deviation. The manager just wants the project with the highest expected profit.TomW: Wait, I'm not sure about that last one. Isn't risk-neutrality different from uncertainty? I'll need to double-check my notes on that.LisaM: Okay, I've got this. Calculate the expected value for each project, compare them, and select the one with the highest. The other factors like standard deviation and range don't matter for this decision.
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Shaun
9 months ago
Okay, I've got this. Calculate the expected value for each project, compare them, and select the one with the highest. The other factors like standard deviation and range don't matter for this decision.
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Julian
9 months ago
Wait, I'm not sure about that last one. Isn't risk-neutrality different from uncertainty? I'll need to double-check my notes on that.
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Barrett
9 months ago
I think the key is to focus on the expected value, not the range of possible outcomes or the standard deviation. The manager just wants the project with the highest expected profit.
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Cathern
9 months ago
Hmm, I'm a bit confused about the difference between uncertainty and risk here. Is the manager risk-seeking or risk-neutral? That could impact the decision.
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Kiera
10 months ago
Okay, this seems straightforward. The manager is looking to maximize expected profit, so I'll need to calculate the expected value for each project and choose the one with the highest.
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Amie
10 months ago
This seems like a straightforward question about the responsibilities of a test analyst in a keyword-driven automation environment. I'll focus on identifying the key business processes that need to be tested.
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Cecily
10 months ago
I'm a bit unsure here, but I think "Experience Targeting" could be the right answer since it lets you show different content to specific audience segments.
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Darell
10 months ago
I'm leaning towards "None of the above," but I can't quite remember the specifics. This feels tricky!
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Jerry
10 months ago
Aircrack-ng is for wireless network attacks, so that's not the best choice here. I think Shodan or Recon-ng would be the most effective tools to gather additional information about the physical security setup.
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Gaynell
1 year ago
Wait, the manager can't just flip a coin to decide? Where's the fun in that?
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Louvenia
1 year 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 year 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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Sommer
1 year ago
I agree, the manager is making a decision under uncertainty, so option C is incorrect. E is the right answer.
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Clorinda
1 year ago
E) The decision is characterized by risk and the manager is risk neutral.
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Emilio
1 year ago
A) The manager will select the project with the lowest standard deviation.
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Lenna
1 year 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
1 year ago
Stefanie: So, maybe option E is the best choice then.
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Mariann
1 year ago
User 3: I think the manager should be risk neutral in this decision.
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Stefanie
1 year ago
User 2: Yeah, I think it's better to consider the standard deviation as well.
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Elden
1 year ago
User 1: I agree, choosing the project with the highest possible outcome seems risky.
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Cyril
1 year 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
1 year ago
User 2: The decision is characterized by risk and the manager is risk neutral.
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Leah
1 year ago
User 1: The manager will select the project with the highest expected value of profit.
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Darrel
1 year ago
But what about the standard deviation? Shouldn't the manager also consider that to assess the risk involved?
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Sylvia
1 year 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
1 year ago
I think the manager will select the project with the highest expected value of profit.
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King
1 year ago
Hmm, the manager should focus on maximizing expected value, not minimizing risk. Option E seems the most appropriate.
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Van
1 year ago
So, the manager is risk neutral in this decision-making process.
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Chu
1 year ago
No, the manager will select the project with the highest possible outcomes, not the lowest standard deviation.
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Antonio
1 year ago
But what about the standard deviation of the projects? Shouldn't that also be considered?
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Lacey
1 year ago
I agree, option E is the best choice when maximizing expected value.
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