Table 101
Returns for Investment Projects Under Different States of the the World

question 24

Multiple Choice

Table 10.1
Returns for investment projects under different states of the world
$$\begin{array} { | l | c | c | c | } \hline & R _ { b } & R _ { n } & R _ { g } \\\hline \text { Project 1 } & \mathbf { 8 0 } & \mathbf { 1 0 0 } & \mathbf { 1 2 0 } \\\hline \text { Project 2 } & \mathbf { 5 0 } & \mathbf { 1 0 0 } & \mathbf { 1 5 0 } \\\hline\end{array}$$
-Suppose that only three states of the world - bad (b) ,normal (n) and good (g) - are possible,and suppose that the normal state occurs with probability 0.5,while the bad and good states each occur with probability 0.25.Consider two investment projects for which the returns in the three states are given in What is the expected return for Project 1?

• A) 200
• B) 150
• C) 100
• D) 120

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Definitions:

Endometriosis

A condition in which tissue spreads outside the womb and attaches itself to other pelvic organs.

Pelvic Organs

The organs within the pelvic area of the body, including the bladder, rectum, and for women, the uterus and ovaries.

Uterus

A female reproductive organ where fertilized eggs are implanted and where the fetus develops until birth.

Semi-Closed Adoptions

Adoption processes where some forms of contact or information are shared between birth and adoptive parents, but not to the extent of fully open adoptions.