John Invested $1,000 in a Risky Investment and Bill Invested

question 56

Multiple Choice

John invested $1,000 in a risky investment and Bill invested $1,000 in a less risky investment.One year later,Bill's investment is worth $1,030.Which of the following statements is MOST correct?

• A) If John's investment is worth less than $1,030, then John was irrational to invest in the risky project.
• B) John's investment must be worth more than $1,030 because of the risk-return trade-off, given that John's investment was more risky.
• C) If John's investment is worth more than $1,030, then Bill was irrational to invest in the less risky investment.
• D) The worth of John's investment cannot be determined with the information given.

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Definitions:

Poise

The quality of being calm, confident, and controlled, especially in a demanding situation.

Good Judgement

The ability to make sensible decisions based on a comprehensive understanding of a situation, considering all relevant factors and potential consequences.

Interview Style

The manner or approach adopted in conducting an interview, which can vary depending on the context and objectives.

Long-Term Goals

Objectives or targets that an individual or organization aims to achieve over an extended period, typically beyond one year.