You are a hotel manager and you are considering four projects that yield different payoffs, depending upon whether there is an economic boom or a recession. The potential payoffs and corresponding payoffs are summarized in the following table.ProjectBoom (50%)Recession (50%)A$20-$10B-$10$20C$30-$30D$50$50The variance in the returns of project B is:

Milton Friedman would eliminate the destabilizing effect of the Federal Reserve's monetary policy by

A) eliminating the Federal Reserve. B) removing the Federal Reserve's political independence. C) requiring that the Federal Reserve choose a monetary aggregate and increase it at a fixed percentage rate each year. D) eliminating the Federal Reserve's right to carry out open-market operations.

The major flaw of the linear probability model is that

A) the actuals can only be 0 and 1, but the predicted are almost always different from that. B) the regression R2 cannot be used as a measure of fit. C) people do not always make clear-cut decisions. D) the predicted values can lie above 1 and below 0.