A manager has a choice of three investment funds. To assess them, he looks at their past investment records over the previous five years. The manager is operating under which condition?
A) certainty
B) probability
C) uncertainty
D) risk
Answer: D
Explanation: The manager can use the investment records over previous years to assign probabilities to each fund. That means he is operating under a condition of risk. Certainty would require that he would know precisely how funds would perform, while uncertainty would mean he would have no way to predict performance. Probability is not a recognized decision-making condition.
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