Two 5-N Boxes Are Attached to Opposite Ends of a Spring

question 10

Multiple Choice

Two 5-N boxes are attached to opposite ends of a spring scale and suspended from pulleys as shown.
-What is the reading on the scale?

• A)0 N
• B)2.5 N
• C)5 N
• D)10 N
• E)25 N

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Definitions:

Nondiversifiable Risk

Risk that cannot be eliminated by investing in many projects or by holding the stocks of many companies.

Diversifiable Risk

Risk that can be eliminated either by investing in many projects or by holding the stocks of many companies.

Expected Return

Expected return is the anticipated profit or loss from an investment, factoring in all possible outcomes weighted by their probabilities.

Asset Beta

A constant that measures the sensitivity of an asset’s return to market movements and, therefore, the asset’s nondiversifiable risk.