Consider the Following Two Investment Alternatives

question 20

Multiple Choice

Consider the following two investment alternatives.First,a risky portfolio that pays a 15 percent rate of return with a probability of 60% or a 5 percent return with a probability of 40%,and second,a T-bill that pays 6 percent.The risk premium on the risky investment is

• A) 11 percent.
• B) 1 percent.
• C) 9 percent.
• D) 5 percent.
• E) none of these.

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Definitions:

Obsessive-compulsive Personality Disorder

A disorder characterized by a preoccupation with orderliness, perfectionism, and control, leading to significant impairments in flexibility and efficiency.

Freudian Theorists

Refers to psychologists or psychoanalysts who build upon or work within the framework of Sigmund Freud's theories on the unconscious, psychosexual development, and defense mechanisms.

Anal Retentive

A psychoanalytic concept suggesting that individuals fixated at the anal stage of development demonstrate traits such as meticulousness, stubbornness, and a need for control.

DSM-5

stands for Diagnostic and Statistical Manual of Mental Disorders, 5th Edition, a handbook used by healthcare professionals as the authoritative guide to diagnose mental disorders.