Goa University 2009 Post Graduate Diploma Management Candidates who aspire to get admission in the Institute have to sit for the XLRI Admissions Test (XAT) conducted by XLRI, Jamshedpur. - Question Pa

D. Chemical College which had four star rating
E. Techno – Institute which had four star rating
84. In which college did Priya study?
A. Anipal Institute
B. Chemical Institute
C. Barla College
D. Deccan College
E. Techno- Institute
85. The person with surname Sanyal was:
A. Sarah studying in Chemical College
B. Swati studying in Barla College
C. Priya studying in Deccan College
D. Jackie studying in Deccan College
E. Sarah studying in Techno- Institute
learn the subsequent and select the best option (Questions 86-89):
Decisions are often „risky
in the sense that their results are not known with certainty.
Presented with a option ranging from a risky prospect that offers a 50 percent chance to win $200
(otherwise nothing) and an option of receiving $100 for sure, most people prefer the sure gain
over the gamble, although the 2 prospects have the identical expected value. (Expected value is the
sum of possible results weighted by their probability of occurrence.) Preference for a sure
result over risky prospect of equal expected value is called risk averse; indeed, people tend to
be risk averse when choosing ranging from prospects with positive results. The tendency towards
risk aversion can be discussed by the notion of diminishing sensitivity, 1st formalized by Daniel
Bernoulli in 1738. Just as the impact of a candle is greater when it is brought into a dark room
than into a room that is well lit so, suggested Bernoulli, the utility resulting from a small increase
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in wealth will be inversely proportional to the amount of wealth already in one
s possession. It
has since been presumed that people have a subjective utility function, and that preferences should
be defined using expected utility instead of expected value. According to expected utility, the
worth of a gamble offering a 50 percent chance to win $200 (otherwise nothing) is 0.50 *
u($200), where u is the person
s concave utility function. (A function is concave or convex if a
line joining 2 points on the curve lies entirely beneath or above the curves, respectively). It
follows from a concave function that the subjective value attached to a gain of $100 is more than
50 percent of the value attached to a gain of $200, which entails preference for the sure $100 gain
and, hence, risk aversion.
Consider now a option ranging from losses. When asked to select ranging from a prospect that offers a 50

Earning:   Approval pending.