Security a Will Yield a 6% Return in One Year

question 125

Multiple Choice

Security A will yield a 6% return in one year. Security B will either yield a 3% return or a 9% return in year with equal probability. Which is the better investment based on risk aversion and why?

• A)Security A, because it has a higher expected return with less risk.
• B)Security B, because it has a higher expected return with less risk.
• C)Security A, because it has an equivalent expected return with less risk.
• D)Security B, because it may potentially produce a 9% return.

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Definitions:

Nonverbal Messages

Types of communication not conveyed through spoken words but through body language, facial expressions, gestures, posture, and other visual cues.

Expressing Nonverbal

The process of conveying information or expressing one's thoughts and emotions without using spoken language, through body language, facial expressions, gestures, and other visual cues.

Spatial Zones

The concept of personal space and how different cultures define and use physical space in social interactions.

Interpersonal Relationships

The connections and associations formed between individuals, including friendships, family bonds, and romantic relationships.