Rashad Is Risk Averse and Has $3,000 with Which to Make

question 39

Multiple Choice

Rashad is risk averse and has $3,000 with which to make a financial investment. He has three options. Option A is a risk-free government bond that pays 5 percent interest each year for two years. Option B is a low-risk stock that analysts expect to be worth about $3,307.50 in two years. Option C is a high-risk stock that is expected to be worth about $3,646.52 in four years. Rashad should choose

• A)option A.
• B)option B.
• C)option C.
• D)either A or B because they are the same to him.

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Definitions:

Poison Arrow Frogs

A group of brightly colored frogs that are known for their powerful toxins, which indigenous people have used on the tips of arrows or darts for hunting.

Fruit-Eating Bats

Bats that primarily consume fruits or nectar from flowers, playing critical roles in ecosystem dynamics such as pollination and seed dispersal.

Ecotone

The transition zone where two communities meet and intergrade.

Transitional Zone

An area or region where two different habitats or ecological communities meet and integrate, often hosting a high diversity of species.