Consider the Following Two Investment Alternatives

question 32

Multiple Choice

Consider the following two investment alternatives. First, a risky portfolio that pays 15% rate of return with a probability of 40% or 5% with a probability of 60%. Second, a Treasury bond that pays 6%. The risk premium on the risky investment is ________.

• A)1%
• B)3%
• C)6%
• D)9%

---

Definitions:

Achievement

The successful attainment of goals, milestones, or objectives, often marked by a sense of accomplishment and recognition.

Power

Power refers to the ability or capacity to direct or influence the behavior of others or the course of events.

Social Intelligence

Social intelligence is the ability to understand and navigate social situations effectively, including the capacity to understand others' feelings, thoughts, and intentions.

Emotional Maturity

This is the ability to understand and manage one's emotions, and to be sensitive to and understand the emotions of others.