## NPTEL Project Management Week 4 Assignment Answers 2024

1. If Mr. Banerjee’s risk adjusted discount rate is 12% and the market interest rate is 10%, then Mr. Banerjee

- is risk averse.
- has a certainty-equivalent coefficient that is greater than one.
- is risk neutral.
- None of these.

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2. For a/ an **_______________** decision maker, the marginal utility of money diminishes.

- risk seeker.
- risk neutral.
- risk averter.
- uncertain.

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3. If a decision maker is risk averse, then the best strategy to select is the one that yields the

- highest expected payoff.
- lowest coefficient of variation.
- highest expected utility.
- lowest standard deviation.

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4. Strategy A has an expected value of 10 and a standard deviation of 3. Strategy B has an expected value of 10 and a standard deviation of 5. Strategy C has an expected value of 15 and a standard deviation of 10. Which one of the following statements is true?

- A risk averse decision maker will always prefer A to B, but may prefer C to A.
- A risk neutral decision maker will always prefer C to A or B.
- A risk seeking decision maker will always prefer C to A or B.
- All of these are correct.

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5. If a person’s utility doubles when their income doubles, then that person is risk

- averse.
- neutral.
- seeking.
- There is not enough information given in the question to determine an answer.

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6. Which of the accompanying techniques for selecting a strategy is predictable with risk averting behavior?

- On the off chance that two methodologies have the same expected benefit, select the one with the smaller standard deviation.
- On the off chance that two methodologies have a similar standard deviation, select the one with the smaller expected benefit.
- Select the methodology with the larger coefficient of variation.
- All of the above are correct.

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7. You are working in a very large project that has a budget of Rs. 10 Cr. and one thousand people are working in it. The project manager constructs a work breakdown structure. The project manager will do the WBS to the detail level of which of the following?

- Task
- Activity
- Work Package
- WBS element

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8. Please refer the data given below for Question number 8 to 15:

A train carrying bank notes worth Rs. 10 Cr., has 10% chance of getting looted on the way by a notorious bandit Pappu Singh. On the off chance that train gets looted, The Garib Bank of India (GBI) will lose Rs. 10 Cr, abandoning an empty chest; on the off chance that the wagon doesn’t get looted, GBI will have the entire money safe with them. GBI maximizes expected utility, and its VNM utility function is u(w)=5w^{0.8}+75. Answer questions 8 to 15 based on the data provided.

What can be said about GBI’s behavior?

- GBI is risk-seeker
- GBI is risk-neutral
- GBI is risk-averse
- Cannot be determined from the given data

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9. What is the expected amount of money GBI will lose?

- Rs.1 Cr
- Rs.9 Cr
- Rs.8.1 Cr
- Rs.0

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10. What is GBI’s expected wealth?

- Rs. 10 Cr
- Rs. 1 Cr
- Rs. 9 Cr
- Rs. 8.1 Cr

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