An Investment Opportunity Has Two Possible Outcomes

question 105

Multiple Choice

An investment opportunity has two possible outcomes. The expected value of the investment opportunity is $250. One outcome yields a $100 payoff and has a probability of 0.25. What is the payoff of the other outcome?

• A) -$400
• B) $0
• C) $150
• D) $300
• E) none of the above

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Definitions:

Condom

a barrier device used during sexual intercourse to reduce the probability of pregnancy and the spread of sexually transmitted infections.

Menopause

The period marking the end of a woman's reproductive years, characterized by the cessation of menstruation and marked hormonal changes.

Age-Related Changes

Natural transformations and modifications that occur in the human body as part of the aging process.

Orgasms

The climax of sexual stimulation, characterized by intense pleasure and release of sexual tension.