The key to making effective decisions under conditions of risk is to
A) recognize that information is not available and approach the situation intuitively.
B) determine the probabilities associated with each alternative as accurately as possible.
C) develop a rational system for ordering your choices in a hierarchy of importance.
D) recognize that you do not know all of the alternatives related to the decision.
E) identify the alternative(s)with completely predictable outcomes.

Question

Quizplus · Accepted Answer

To make effective decisions under conditions of risk, it is important to determine the probabilities associated with each alternative as accurately as possible. This will help in making informed decisions that are based on a clear understanding of the risks and potential outcomes associated with each option. Developing a rational system for ordering your choices in a hierarchy of importance can also be useful, but it depends on having accurate information about the available alternatives and their respective risks and rewards. While intuition can be helpful in some circumstances, it is not a substitute for careful analysis and accurate information. Similarly, identifying alternatives with completely predictable outcomes may not be possible in many situations and can be overly limiting. Finally, recognizing that you do not know all of the alternatives related to the decision can be a useful starting point for further research and analysis, but it is not sufficient for making informed decisions on its own.

The Key to Making Effective Decisions Under Conditions of Risk