A Risk-Free Investment of $10,000 Will Return 8

question 9

Multiple Choice

A risk-free investment of $10,000 will return 8%. A risky $10,000 investment has a 50% chance of
Defaulting and returning only $3,000. What default premium must the risky investment offer?

• A)10.6%
• B)78.0%
• C)36.0%
• D)25.2%

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Definitions:

Control Panel Window

A component of the operating system interface providing access to system settings and controls.

Category View

A display format in software applications where items or options are organized and shown based on predefined categories.

Standard User Account

A standard user account is a type of computer account that has permissions to perform day-to-day tasks but does not have the rights to make changes affecting other users or the security of the system.

System Settings

Adjustments and preferences that can be set on a computer or device to control its operations and functionalities.