Solve the Problem A) Yes
B) No

question 20

Multiple Choice

Solve the problem.
- $$\begin{array} { l | c } \text { Outcome } & \text { Probability } \\\hline \text { Red } & 0.16 \\\text { Blue } & 0.17 \\\text { Green } & 0.25 \\\text { White } & 0.27\end{array}$$

• A) Yes
• B) No

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Definitions:

Expected Return

The weighted average of all possible returns for a given investment, considering the probabilities of each outcome.

Standard Deviation

A measure of the dispersion or variability of a set of data points or investment returns, indicating the degree of risk or volatility.

Risk-Free Asset

An investment with a guaranteed return and no risk of financial loss, typically represented by government bonds.

Capital Allocation Line

A line that graphically represents the risk-versus-return profile of risky assets, and indicates the optimal portfolio of risky and risk-free assets.