If an Investment Offered an Expected Payoff of $100 with $0

question 76

Multiple Choice

If an investment offered an expected payoff of $100 with $0 variance, you would know that:

• A) half of the time the payoff is $100 and the other half it is $0.
• B) the payoff is always $100.
• C) half of the time the payoff is $200 and the other half it is $0.
• D) half of the time the payoff is $200 and the other half it is $50.

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Definitions:

Retirement Account

A financial account that offers tax benefits for saving for retirement.

Monthly Rate

The interest rate or return expressed on a monthly basis, often used in loan repayments or savings calculations.

Employer Contributes

Refers to the financial or resource input made by employers towards employee benefits, retirement plans, or health insurance.

Saving

The process of setting aside a portion of current income for future use, or the amount of money that is put aside.