Consider the Following Two Investment Alternatives

question 44

Multiple Choice

Consider the following two investment alternatives. First, a risky portfolio that pays 20% rate of return with a probability of 60% or 5% with a probability of 40%. Second, a Treasury bond that pays 6%. If you invest $50 000 in the risky portfolio, your expected profit would be ________.

• A)$3 000
• B)$7 000
• C)$7 500
• D)$10 000

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Definitions:

Public Use

The use of land or property by a government for activities and projects that benefit the general public.

Personal Property

Refers to movable items owned by an individual or a corporation, including furniture, vehicles, electronics, stocks, and intellectual property, as opposed to real property like land or buildings.

Real Property

Refers to land and anything permanently attached to it, such as buildings, in contrast to personal property.

Tangible Property

Physical assets that can be touched and seen, such as real estate, vehicles, furniture, and other material possessions.