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Joined: 11 Aug 2012
Posts: 128
Schools: HBS '16, Stanford '16
Followers: 0

Kudos [?]: 56 [0], given: 16

Benefits [#permalink] New post 31 May 2013, 12:14
Check the graphic below.

I agree with the OA. However, I don't understand a part of the OE:
In the explanation of the OA for the 2nd column, the OE mentions this:
"An employee would receive the lump-sum bonus on the birth of his/her first child only once. By comparison, the expected number of times an employee would receive the 10% raise - the benefit with the next highest instance cost - is 2 times in a 20-year career....)

Can someone explain the part highlighted in red?


[Reveal] Spoiler:
Column 1: A; Column 2: D


IIR00831.png [ 589.21 KiB | Viewed 793 times ]

Status: Training
Joined: 03 Jun 2013
Posts: 90
Location: Canada
GPA: 3.7
Followers: 2

Kudos [?]: 78 [0], given: 3

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Re: Benefits [#permalink] New post 08 Jun 2013, 20:54

They're just applying some probability to the logic.

If every year, 10% of employees are chosen for a raise, then an employee in any given year has a 1/10 chance of getting the raise.

So, in 20 years, an employee's number of raises would take on an expected value of 1/10 * 20 = 2; i.e, "2 times in a 20 year career".

Hope that clarifies.

KUDOS please if my post was useful!

Joined: 19 May 2012
Posts: 36
Location: India
Concentration: International Business, Healthcare
GMAT Date: 03-03-2014
WE: Information Technology (Computer Software)
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Re: Benefits [#permalink] New post 08 Aug 2013, 19:16
Lowest F/C ratio means F must be less than C.
Option D will occur with very minimum frequency hence D is the correct option.

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Re: Benefits   [#permalink] 08 Aug 2013, 19:16
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