ACCA PM · Chapter 9 · Question 6 of 11
A manager always chooses the option with the best worst-case outcome. Which attitude to risk and decision criterion does this indicate?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Risk-averse, using the maximin criterion
Explanation
Choosing the option whose worst outcome is least bad reflects a pessimistic, risk-averse attitude and is the maximin rule. Maximax suits a risk-seeker, and expected values suit a risk-neutral decision-maker.
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