Exam 2 RMI 2302 - FSU Dr. Nyce Exam
2026 Questions and Answers
Who uses decision making ? - Correct answer-Individuals
Organizations
Government
Individuals use expected ____ - Correct answer-Utility
Organizations use expected ____ - Correct answer-Value
What entity is able to take on risk regardless of the reward - Correct answer-Gov't
What is one of the big problems we have with modeling how decisions are made? -
Correct answer-Decisions are made is that they do not explicitly account for biases
on the part of the decision maker
What is Bias? - Correct answer-an inclination of temperaments or outlook to
present or hold a partial perspective at the expense of alternatives in reference to
objects, people, or groups.
Types of Bias 1 of 5 - Correct answer-1. Age biases
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,Types of Bias 2 of 5 - Correct answer-2. Cultural biases
Types of Bias 3 of 5 - Correct answer-3. Experience biases
Types of Bias 4 of 5 - Correct answer-4. Gender biases
Types of Bias 5 of 5 - Correct answer-5. Media biases
Age Biases - Correct answer-People in certain age groups tend to interpret
information about risk differently
Cultural Biases - Correct answer-Certain culture view of risk differ. (example:
religion biases)
Experience Biases - Correct answer-People who have experienced a low-
probability/high-consequence event tend to overestimate its likelihood, people who
have not experienced one, tend to underestimate (example: control biases)
Gender Biases - Correct answer-(these are not systematic- you cannot say all men
or all women think a certain way)
Media Biases - Correct answer-risks that garner a lot of media attention (murder,
terrorism, kidnapping, etc.) are typically overestimated, while other risks (car
accidents, health risks) tend to be underestimated
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, CAPM - Correct answer-The Capital Asset Pricing Model - only reward systemic
risk and not worried about diversifiable risk.
What is Efficient Frontier - Correct answer-a graph that shows the tradeoff
between risk and reward.
What does the Efficient Frontier line represent? - Correct answer-Represents the
optimal combination of risk and return
What is an incentive - Correct answer-something that motivates individuals to
perform an action
What are the types of incentives: 1 of 7 - Correct answer-1. Financial
What are the types of incentives: 2 of 7 - Correct answer-2. Moral
What are the types of incentives: 3 of 7 - Correct answer-3. Natural
What are the types of incentives: 4 of 7 - Correct answer-4. Coercive
What are the types of incentives: 5 of 7 - Correct answer-5. Personal
What are the types of incentives: 6 of 7 - Correct answer-6. Social
What are the types of incentives: 7 of 7 - Correct answer-7.Political
Financial Incentive - Correct answer-expect some form of material reward in
exchange for acting in a particular way.
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2026 Questions and Answers
Who uses decision making ? - Correct answer-Individuals
Organizations
Government
Individuals use expected ____ - Correct answer-Utility
Organizations use expected ____ - Correct answer-Value
What entity is able to take on risk regardless of the reward - Correct answer-Gov't
What is one of the big problems we have with modeling how decisions are made? -
Correct answer-Decisions are made is that they do not explicitly account for biases
on the part of the decision maker
What is Bias? - Correct answer-an inclination of temperaments or outlook to
present or hold a partial perspective at the expense of alternatives in reference to
objects, people, or groups.
Types of Bias 1 of 5 - Correct answer-1. Age biases
©COPYRIGHT 2025, ALL RIGHTS RESERVE 1
,Types of Bias 2 of 5 - Correct answer-2. Cultural biases
Types of Bias 3 of 5 - Correct answer-3. Experience biases
Types of Bias 4 of 5 - Correct answer-4. Gender biases
Types of Bias 5 of 5 - Correct answer-5. Media biases
Age Biases - Correct answer-People in certain age groups tend to interpret
information about risk differently
Cultural Biases - Correct answer-Certain culture view of risk differ. (example:
religion biases)
Experience Biases - Correct answer-People who have experienced a low-
probability/high-consequence event tend to overestimate its likelihood, people who
have not experienced one, tend to underestimate (example: control biases)
Gender Biases - Correct answer-(these are not systematic- you cannot say all men
or all women think a certain way)
Media Biases - Correct answer-risks that garner a lot of media attention (murder,
terrorism, kidnapping, etc.) are typically overestimated, while other risks (car
accidents, health risks) tend to be underestimated
©COPYRIGHT 2025, ALL RIGHTS RESERVE 2
, CAPM - Correct answer-The Capital Asset Pricing Model - only reward systemic
risk and not worried about diversifiable risk.
What is Efficient Frontier - Correct answer-a graph that shows the tradeoff
between risk and reward.
What does the Efficient Frontier line represent? - Correct answer-Represents the
optimal combination of risk and return
What is an incentive - Correct answer-something that motivates individuals to
perform an action
What are the types of incentives: 1 of 7 - Correct answer-1. Financial
What are the types of incentives: 2 of 7 - Correct answer-2. Moral
What are the types of incentives: 3 of 7 - Correct answer-3. Natural
What are the types of incentives: 4 of 7 - Correct answer-4. Coercive
What are the types of incentives: 5 of 7 - Correct answer-5. Personal
What are the types of incentives: 6 of 7 - Correct answer-6. Social
What are the types of incentives: 7 of 7 - Correct answer-7.Political
Financial Incentive - Correct answer-expect some form of material reward in
exchange for acting in a particular way.
©COPYRIGHT 2025, ALL RIGHTS RESERVE 3
