Accounting Multiple Choice Question – 24 November 2024

A particular project called the Staffie will yield either a profit of £100,000 or a loss of £50,000.

The profit will arise with a probability of 0.8 and the loss will arise with a probability of 0.2.

The project contains?

Select ONE answer:

1. Uncertainty only
2. Risk only
3. Both uncertainty and risk
4. Neither risk nor uncertainty

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Notcorrect
2. Correct == > All the outcomes and the probability of them occurring are known. As a result, there is no uncertainty, only risk.
3. Not correct
4. Not correct

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