Asked by Julia Ellinghaus on May 27, 2024
Verified
In Table 5.3, the standard deviation is:
A) highest for the HMO choice, and it is $76,000.
B) lowest for the HMO choice.
C) higher for owning one's own practice than for going into research.
D) higher for the HMO choice than for going into research.
Macroeconomic Environments
The broad economic conditions and contexts that affect the economy as a whole, including inflation rates, growth rates, employment levels, and government policies.
Standard Deviation
A statistical measure that quantifies the amount of variation or dispersion of a set of data values from its mean.
HMO
Health Maintenance Organization, a medical insurance group that provides health services for a fixed annual fee.
- Understand the methodology to calculate standard deviation as a measure of risk.
Verified Answer
GC
Gracie CollinsMay 31, 2024
Final Answer :
B
Explanation :
The table shows that the standard deviation is lowest for the HMO choice, indicating that this option has the least variability in potential income in different macroeconomic environments. Therefore, choosing the HMO option is the most stable and predictable option among the choices presented.
Learning Objectives
- Understand the methodology to calculate standard deviation as a measure of risk.