Exhibit 1A -Refer to Exhibit 1A

question 5

Multiple Choice

Exhibit 1A.1
$$\begin{array} { c c } \text { Probability } & \text { Rate of Return } \\\hline .15 & - .10 \\.15 & - .20 \\.35 & .00 \\.25 & .15 \\.10 & .15\end{array}$$
-Refer to Exhibit 1A.1.The expected return from this investment is

• A) -0.0752
• B) -0.0040
• C) 0.00
• D) 0.0075
• E) 0.4545

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Definitions:

Rationally Ignorant

A state where the cost of educating oneself on an issue exceeds the potential benefit that the knowledge would provide.

Public Choice Perspective

A theoretical framework that applies economic principles to political processes, viewing government actions and decisions through the lens of economic efficiency and individual self-interest.

City Budget

An annual financial plan outlining expected revenues and expenditures for a city’s operations and capital projects.

Fiscal Policy

Governmental decisions on taxation and spending policies aimed at influencing the national economy's performance.