(Scenario: Diversification)Use Scenario: Diversification

question 128

Multiple Choice

(Scenario: Diversification) Use Scenario: Diversification.If Morris invests all of his money in the sunglass company,what is his expected gain or loss? Scenario: Diversification
Morris is considering investing $10,000 in a sunglass company or a rain poncho company.If it is a rainy year and he invests only in the sunglass company,he will lose $5,000.However,if it is a rainy year and he invests only in the rain poncho company,he will earn $10,000.If it is a sunny year and he invests only in the sunglass company,he will earn $10,000;if he invests only in the rain poncho company,he will lose $5,000 in a sunny year.There is a 50% chance of a sunny year and a 50% chance of a rainy year.

• A)a loss of $2,500
• B)to break even
• C)a gain of $2,500
• D)a gain of $10,000

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Definitions:

Genes

Units of heredity made up of DNA that are responsible for the genetic traits passed from parents to offspring.

Estrogen

A group of steroid hormones that promote the development and maintenance of female characteristics of the body.

Progesterone

A steroid hormone released by the corpus luteum that stimulates the uterus to prepare for pregnancy.

Testosterone

A steroid hormone produced primarily in the testes of males and the ovaries of females, playing a key role in the development of male reproductive tissues and secondary sexual characteristics.