Multiple Choice
The key distinction between risk and uncertainty is
A) risk cannot be quantified,priced or traded
B) uncertainty refers to not knowing possible outcomes or their probabilities
C) uncertainty is modeled by listing the possible outcomes and assigning probabilities to the outcomes
D) risk has to do with not knowing the probability distribution of a random variable
Correct Answer:
Verified
Correct Answer:
Verified
Q2: Three possibilities are equally likely and have
Q11: You can invest in either project A
Q20: Three possibilities have probabilities 0.5,0.3 and 0.2
Q34: Heads and tails are equally likely but
Q36: You want to run a difference-in-difference experiment
Q38: A "false negative" is<br>A)when you incorrectly conclude
Q39: You can invest $100,000 into either project
Q49: Four possibilities have probabilities 0.4,0.2,0.2 and 0.2
Q58: Five possibilities are equally likely and have
Q70: Four possibilities have probabilities 0.4,0.2,0.2 and 0.2