The Seller of an Existing House Claims It Is in Great

question 49

Multiple Choice

The seller of an existing house claims it is in great shape and offers a two-year warranty on the house.His statements about the quality of his house are

• A) not truthful.
• B) overstated.
• C) likely to be true,because the warranty is costly to fake.
• D) likely to be untrue,otherwise he would not offer the warranty.
• E) credible even in the absence of a warranty.

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Definitions:

Risk

The potential for loss or an undesirable outcome, often assessed in the context of investments or decision-making.

Portfolio

An array of fiscal investments encompassing stock shares, bond notes, commodities, spendable cash, and assets comparable to cash, plus mutual funds and ETFs.

Portfolio Expected Return

The weighted average of the expected returns on the assets included in a portfolio, representing the overall expected profit or loss.

Covariance

A statistical measure that indicates the extent to which two variables change together, signaling the direction of their linear relationship.