"Decision making under risk" means the decision maker
A)has no data on which to base his or her decision.
B)is risk-averse,avoiding risky investments.
C)knows all the risks involved in the decision.
D)can estimate decision data with some probability.
E)is making an important decision with long- term consequences.

Question

Quizplus · Accepted Answer

Decision making under risk means that the decision maker has some data, but there is uncertainty about the outcome. Therefore, the decision maker has to estimate the decision data with some probability. Option A, B, and E are not true for decision making under risk, and option C is too optimistic as the decision maker cannot always know all the risks involved in the decision.

"Decision Making Under Risk" Means the Decision Maker