The following table shows the expected value and variance for 5 projects a firm can undertake. $$\begin{array} { c c c }
\text { Project } & \text { Expecled Value } & \text { Variance } \
A & \$ 100 & \$ 124 \
B & \$ 220 & \$ 110 \
C & \$ 100 & \$ 13 \pm \
D & \$ 100 & \$ 13 \pm \
E & \$ 200 & \$ 124
\end{array}$$ Which of the following is (are)correct?
A)Project B dominates all others
B)Project E dominates all others
C)Project C is the least preferable
D)a and c
E)none of the above

Question

The following table shows the expected value and variance for 5 projects a firm can undertake. $$\begin{array} { c c c } 
\text { Project } & \text { Expecled Value } & \text { Variance } \
A & \$ 100 & \$ 124 \
B & \$ 220 & \$ 110 \
C & \$ 100 & \$ 13 \pm \
D & \$ 100 & \$ 13 \pm \
E & \$ 200 & \$ 124
\end{array}$$ Which of the following is (are)correct?
A)Project B dominates all others
B)Project E dominates all others
C)Project C is the least preferable
D)a and c
E)none of the above

Quizplus · Accepted Answer

Project B has the highest expected value and the lowest variance, so it dominates all others. Project C has the lowest expected value and the highest variance, so it is the least preferable.

The Following Table Shows the Expected Value and Variance for 5