Question

As a student majoring in business administration, Haruto would like to learn more about the relationship between information available to a business decision-maker and risk. Which of the following is correct regarding this relationship?

Option 1: More information always reduces risk.
Option 2: Risk is independent of the information available.
Option 3: The relationship between information and risk is complex and depends on various factors.
Option 4: Less information leads to higher risk.

Answer 1

The correct option is that the relationship between information and risk is complex and depends on various factors in business decision-making. Option 3

Step-by-step explanation:

The correct option regarding the relationship between information available to a business decision-maker and risk is Option 3: The relationship between information and risk is complex and depends on various factors. This means that the impact of information on risk is not straightforward and can be influenced by different variables.

Information is crucial for decision-making, but having more information does not always guarantee a reduction in risk. For example, if the information is inaccurate or incomplete, it can actually lead to higher risk. On the other hand, having less information can also increase risk because it limits the decision-maker's ability to fully assess and mitigate potential risks.

The relationship between information and risk is context-dependent and requires careful analysis of the specific situation at hand. It is important for business decision-makers to evaluate the quality, relevance, and reliability of information in order to make informed decisions and manage risk effectively. Option 3