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Scenario: Diversification
Morris is considering investing $10,000 in a sunglass company or a rain poncho company. If it is a rainy year and he invests only in the sunglass company, he will lose $5,000. However, if it is a rainy year and he invests only in the rain poncho company, he will earn $10,000. If it is a sunny year and he invests only in the sunglass company, he will earn $10,000; if he invests only in the rain poncho company, he will lose $5,000 in a sunny year. There is a 50% chance of a sunny year and a 50% chance of a rainy year.
-(Scenario: Diversification) Look at the scenario Diversification. If Morris invests all of his money in the sunglass company, what is his expected gain or loss?


Definitions:

Impedance

The total opposition (combining resistance and reactance) a circuit presents to alternating current.

Capacitance

The ability of a component or circuit to collect and store energy in the form of an electrical charge, measured in Farads.

Bridge Circuit

A circuit that consists of four sections connected in series to form a closed loop.

D'Arsonval Shunt

A D'Arsonval shunt is a precision resistor used in conjunction with a D'Arsonval meter movement to allow the measurement of high currents by diverting some of the current away from the sensitive galvanometer coil.

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