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

Actual exam question for CIMA's CIMAPRO19-P02-1 exam

Question #: 74
Topic #: 8

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.

AThe manager will select the project with the lowest standard deviation.

BThe range of possible outcomes for each project is not important to the manager.

CThe decision is characterized by uncertainty and the manager is risk seeking.

DThe manager will select the project with the highest of all of the possible outcomes.

EThe decision is characterized by risk and the manager is risk neutral.

Show Suggested Answer

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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