Exams Are Approaching and Helen Is Allocating Time to Studying

question 39

Short Answer

Exams are approaching and Helen is allocating time to studying for exams. She thinks that with the appropriate amount of studying, she has a 70% chance of getting an A in Spanish, and a 20% chance of getting a B in Marketing. Assuming she has no obstacles limiting her available time to allocate to each subject, what is the probability that Helen gets an A in Spanish or a B in Marketing?

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Definitions:

Total Risk

The complete range of risk associated with an investment, including both systematic and unsystematic risk.

Risk Premium

The additional return an investor demands for taking on a higher risk compared to a risk-free asset, indicating the compensation for bearing extra risk.

Principle of Diversification

A risk management strategy that mixes a wide variety of investments within a portfolio to minimize risks.

Efficient Market

A financial market theory stating prices fully reflect all available information, making it impossible to consistently achieve higher returns.