Exhibit 14.5
The following questions are based on the information below.
An investor is considering 4 investments, A, B, C, D. 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 decision tree has been developed for the problem. The investor has estimated the probability of a declining economy at 40% and an expanding economy at 60%.
-An alternative
A) is a course of action intended to solve a problem
B) is always feasible
C) is never feasible
D) is realistic

Question

Exhibit 14.5
The following questions are based on the information below.
An investor is considering 4 investments, A, B, C, D. 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 decision tree has been developed for the problem. The investor has estimated the probability of a declining economy at 40% and an expanding economy at 60%. 
-An alternative
A) is a course of action intended to solve a problem 
B) is always feasible 
C) is never feasible 
D) is realistic

Quizplus · Accepted Answer

An alternative is essentially a course of action that is considered in order to solve a problem. It represents a different approach or strategy that could be taken in lieu of the current one. The feasibility and realism of an alternative can vary, so options B, C, and D are not universally true.

Exhibit 14.5 The Following Questions Are Based on the Information Below