Exam 2 RMI 2302 - FSU Dr. Nyce Exam Questions With Verified Answers

Exam 2 RMI 2302 - FSU Dr. Nyce Exam Questions With Verified Answers Who uses decision making ? - answerIndividuals Organizations Government Individuals use expected ____ - answerUtility Organizations use expected ____ - answerValue What entity is able to take on risk regardless of the reward - answerGov't What is one of the big problems we have with modeling how decisions are made? - answerDecisions are made is that they do not explicitly account for biases on the part of the decision maker What is Bias? - answeran 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 - answer1. Age biases Types of Bias 2 of 5 - answer2. Cultural biases Types of Bias 3 of 5 - answer3. Experience biases Types of Bias 4 of 5 - answer4. Gender biases Types of Bias 5 of 5 - answer5. Media biases Age Biases - answerPeople in certain age groups tend to interpret information about risk differently Cultural Biases - answerCertain culture view of risk differ. (example: religion biases) Experience Biases - answerPeople 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 - answer(these are not systematic- you cannot say all men or all women think a certain way) Media Biases - answerrisks 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 CAPM - answerThe Capital Asset Pricing Model - only reward systemic risk and not worried about diversifiable risk. What is Efficient Frontier - answera graph that shows the tradeoff between risk and reward. What does the Efficient Frontier line represent? - answerRepresents the optimal combination of risk and return What is an incentive - answersomething that motivates individuals to perform an action What are the types of incentives: 1 of 7 - answer1. Financial What are the types of incentives: 2 of 7 - answer2. Moral What are the types of incentives: 3 of 7 - answer3. Natural What are the types of incentives: 4 of 7 - answer4. Coercive What are the types of incentives: 5 of 7 - answer5. Personal What are the types of incentives: 6 of 7 - answer6. Social What are the types of incentives: 7 of 7 - answer7.Political Financial Incentive - answerexpect some form of material reward in exchange for acting in a particular way. Moral Incentive - answer"do the right thing" Natural Incentive - answer"curiosity, fear, anger, pain, joy, pursuit of happiness" Coercive Incentive - answernegative reinforcement Personal Incentive - answermotivate an individual through their tastes, desires, and the ambition to achieve remarkable feats. Social Incentives - answertakes into account the situation faced by any individual in a given position within a given society by taking into account practices, rules, and societal norms Political Incentives - answereffect the Short Term Planning which is the opposite of what we want our government to do. We want them to think Long Term How does an organization get people to buy/use its products? - answerAdvertising Loyalty Programs