You Are Going to Add One of the Following Three

question 126

Multiple Choice

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

Good Argument

An argument that is logically sound, with premises that are true and relevant, leading to a conclusion that follows logically.

Good Listening Skills

The ability to actively understand information provided by the speaker, showing interest, and providing feedback.

Arguments

A series of statements or reasons made to persuade others that an action or idea is right or wrong.

Rational Support

Justification or backing based on reason, logic, or facts.