Instruction 5 -Referring to Instruction 5

question 70

Short Answer

Instruction 5.3
There are two houses with almost identical characteristics available for investment in two different neighbourhoods with drastically different demographic composition. The anticipated gain in value when the houses are sold in 10 years has the following probability distribution:
Returns
$$\begin{array} { | c | c | c | } \hline \text { Probability } & \text { Neighbourhood A } & \text { Neighbourhood B } \\\hline 0.25 & - \$ 22,500 & \$ 30,500 \\\hline 0.40 & \$ 10,000 & \$ 25,000 \\\hline 0.35 & \$ 40,500 & \$ 10,500 \\\hline\end{array}$$
-Referring to Instruction 5.3,if your investment preference is to minimise the amount of risk that you have to take and do not care at all about the expected return,will you choose a portfolio that will consist of 10%,30%,50%,70% or 90% of your money on the house in neighbourhood A and the remaining on the house in neighbourhood B?

---

Definitions:

Fiber Optic Wire

A type of cable made of thin strands of glass or plastic that transmits data at high speeds using light signals.

Time and Place Utility

The value added to products through making them available at the right time and location to meet consumer needs.

Pipeline

In supply chain, refers to the flow of goods and materials from the supplier to the customer, as well as the processes that move products through the stages of production to delivery.

High-value Products

Goods or services that provide significant value to the customer, often due to their quality, uniqueness, or customization.