Use the Below Information to Answer the Following Question U = E(r ) - (A/2)s2 Which Investment Would You

question 48

Multiple Choice

Use the below information to answer the following question. $$\begin{array} { l c c } \text { Investment } & \begin{array} { c } \text { Expected } \\\text { Return E(r) }\end{array} & \begin{array} { c } \text { Standard } \\\text { Deviation }\end{array} \\1 & 0.12 & 0.3 \\2 & 0.15 & 0.5 \\3 & 0.21 & 0.16 \\4 & 0.24 & 0.21 \\\hline\end{array}$$ U = E(r ) - (A/2) s2 Which investment would you select if you were risk neutral?

• A) 1
• B) 2
• C) 3
• D) 4
• E) Cannot be determined from the information given.

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Definitions:

Child And Dependent Care Credit

A tax credit offered to taxpayers for expenses related to the care of children under 13 or disabled dependents, enabling the taxpayer to work or look for work.

Dependent Child

A child who relies on another person for more than half of their support and qualifies for the potential of tax benefits for the supporting individual.

Full-Time Student

An individual who is enrolled in a post-secondary institution and meets the institution's requirements for full-time status.

Qualified Day Care Center

A facility that meets certain criteria and regulations to provide childcare services, often eligible for specific tax benefits.