Consider the Following Two Investment Alternatives

question 43

Multiple Choice

Consider the following two investment alternatives.First,a risky portfolio that pays 20% rate of return with a probability of 60% or 5% with a probability of 40%.Second,a treasury bill that pays 6%.If you invest $50,000 in the risky portfolio,your expected profit would be _________.

• A) $3,000
• B) $7,000
• C) $7,500
• D) $10,000

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Definitions:

Trojan Horse

A malicious software that misleads users about its true intent, typically creating a backdoor in a computer system.

Virus

Malicious software that can attach itself to (or “infect”) other computer programs without the owner of the program being aware of the infection.

Intellectual Property

The intangible property created by individuals or corporations, which is protected under trade secret, patent, and copyright laws.

Statutory Grant

A legal mechanism through which government agencies provide funds to organizations, typically for specified purposes, under the authority of law.