What Is the Expected Payoff of an Investment That Yields

question 33

Multiple Choice

What is the expected payoff of an investment that yields $5,000 with a probability of 0.15 and $500 with a probability of 0.85?

• A) $325
• B) $5,500
• C) $1,175
• D) $2,750

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Definitions:

Naturalistic Observation

A research method involving observing subjects in their natural environment without any manipulation by the observer.

Manic-depressive

An outdated term referring to bipolar disorder, characterized by drastic mood swings from manic highs to depressive lows.

Psychiatric care

Medical treatment and support services specifically aimed at diagnosing, treating, and managing mental health conditions.

Case study

An in-depth analysis of a single event, situation, or individual to explore causation and find underlying principles.