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Risk_Perception_Case_Group_Qs_S08 - PAM 423 Questions for...

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PAM 423 Questions for Case Assignment 2 Group Portion of Assignment Spring 2008 Due Date: Thursday April 3, end of class Instructions Answer these questions based on discussion within your group. Turn in a single written response for the group, and attach each group member’s answers to the individual case questions. The Cornell Honor Code applies to the use of materials from sources other than your group members’ opinions and answers to the individual portion of the assignment. Note 1: Bullet points are acceptable responses. Note 2: Please put all participants’ names and your group number on the group answers. Questions 1. Economic theory directs managers to make risk management set the marginal benefit of risk management (reductions in the cost of risk) equal to the marginal cost of risk management. When risk management is costly, this perspective implies that it is optimal to accept some risk and that “zero risk” is not an appropriate risk management objective.
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