You Are Going to Add One of the Following Three

question 54

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.

---

Definitions:

Uterus

A female reproductive organ in which a fertilized egg implants and develops into a fetus.

Nature

The inherent traits and characteristics of an organism or the natural world as a whole.

Nurture

The influence of environmental factors on one's development, apart from hereditary traits.

Nature Versus Nurture

A discussion focused on the comparative significance of a person's inherent characteristics (nature) as opposed to their life experiences (nurture) in shaping variations in physiological and behavioral characteristics.