Risk Assessment Scenarios

Build fluency in distinguishing risk from uncertainty, calculating expected values, and recognizing the psychological biases that warp human risk perception. These skills protect you from both reckless overconfidence and paralyzing overcaution.

intermediate15 minDecision Making

Question 1 of 520% Complete

A startup founder must choose between two growth strategies. Strategy A: spend $200,000 on paid advertising with a 70% chance of generating $500,000 in revenue and a 30% chance of generating only $50,000. Strategy B: spend $200,000 on a sales team with a 50% chance of generating $600,000 and a 50% chance of generating $150,000. The founder has only $210,000 in the bank. Rank these strategies by expected profit.