You Are Going to Add One of the Following Three

question 75

Multiple Choice

You are going to add one of the following three projects to your already well-diversified portfolio.
PROJECT 1 PROJECT 2

PROJECT 3

Assume the risk-free rate of return is 2% and the market risk premium is 8%.If you are a risk averse investor,which project should you choose?

• A) Project 1
• B) Project 2
• C) Project 3
• D) Either Project 2 or Project 3 because the higher expected return on project 3 offsets its higher risk

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Definitions:

Pronuclei

The nuclei of the sperm and egg before they fuse in fertilization, each containing a single set of chromosomes from the respective parent.

Diploid

Normal number of chromosomes (in humans, 46 chromosomes) in somatic cells.

Chromosomes

Long strands of DNA wrapped around proteins, located in the cell nucleus, which carry genetic information.

Pluripotent

The ability of a stem cell to differentiate into any type of cell in the body but not capable of forming an entire organism.