A manager believes there is a 10 percent chance their firm will have to pay $500,000, a 20 percent chance that they will have to pay $400,000 and a 70 percent chance they will be found innocent and pay nothing except the legal fees of $100,000. If the manager chooses to not enter into the litigation and to settle for $230,000 (pay the plaintiff), which of the following is true?
A) The manager is risk intolerant.
B) The manager is a risk lover.
C) The manager is risk neutral.
D) The manager is risk averse.
D) The manager is risk averse.
Economics
You might also like to view...
New information ought not to influence economic decision-making if ________
A) consumers rely on rational expectations B) monetary policy changes C) monetary and/or fiscal policy changes D) that information has already been anticipated
Economics
Holding other things constant, if the Japanese Yen, appreciates, it makes the imports to Japan
a. More expensive for Japanese customer b. Less expensive for Japanese customers c. Neither more or less expensive for importers d. None of the above
Economics