Instruction 5 -Referring to Instruction 5

question 126

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 you can invest 30% of your money on the house in neighbourhood A and the remaining on the house in neighbourhood B,what is the portfolio risk of your investment?

---

Definitions:

Robert Selman

A psychologist known for his work on the development of social understanding in children and his stages of perspective-taking.

Reprimand

A form of verbal or written criticism indicating disapproval of someone's behavior or work.

Anticipates

Refers to the act of looking forward to or expecting a specific event, outcome, or situation.

Perspective-Taking Skills

The ability to understand and consider the thoughts, feelings, or viewpoints of others.