Exhibit 14.1
The following questions are based on the information below.
An investor is considering 4 investments, A, B, C and leaving his money in the bank. The payoff from each investment is a function of the economic climate over the next 2 years. The economy can expand or decline. The following payoff matrix has been developed for the decision problem.
-Although modeling provides valuable insight to decision makers, decision making remains a difficult task. Which of the following is not a primary cause for this difficulty discussed in the Decision Analysis chapter?
A) Uncertainty regarding the future.
B) Models provide decisions for the decision maker.
C) Conflicting values.
D) Conflicting objectives.

Question

Exhibit 14.1
The following questions are based on the information below.
An investor is considering 4 investments, A, B, C and leaving his money in the bank. The payoff from each investment is a function of the economic climate over the next 2 years. The economy can expand or decline. The following payoff matrix has been developed for the decision problem. 
-Although modeling provides valuable insight to decision makers, decision making remains a difficult task. Which of the following is not a primary cause for this difficulty discussed in the Decision Analysis chapter?
A) Uncertainty regarding the future. 
B) Models provide decisions for the decision maker. 
C) Conflicting values. 
D) Conflicting objectives.

Quizplus · Accepted Answer

Although models can provide useful information for decision making, they do not make decisions for the decision maker. The ultimate decision rests with the decision maker, who must take into account multiple factors including uncertainty, conflicting values, and conflicting objectives. In this case, the best choice(s) would depend on the investor's risk tolerance and investment goals.

Exhibit 14.1 The Following Questions Are Based on the Information Below