SCENARIO 5-1 There Are Two Houses with Almost Identical Characteristics Available for Available

question 19

Essay

SCENARIO 5-1
There are two houses with almost identical characteristics available for investment in two different
neighborhoods with drastically different demographic composition.The anticipated gain in value
when the houses are sold in 10 years has the following probability distribution:
-Referring to Scenario 5-1, if you can invest 30% of your money on the house in neighborhood
A and the remaining on the house in neighborhood B, what is the portfolio risk of your
investment?

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Definitions:

Relationships

The connections, associations, or interactions between individuals or groups.

Inborn Predisposition

Natural tendencies or inclinations present at birth that influence behavior, preferences, or susceptibilities.

Instinct

An innate, typically fixed pattern of behavior in animals in response to certain stimuli that is unlearned and often serves survival purposes.

Affiliation Motive

describes the psychological need to build relationships, feel connected, and interact with others, often driving social behavior and group membership.