Instruction 5 -Referring to Instruction 5

question 117

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 maximise your expected return and not worry at all about the risk that you have to take,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?

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Definitions:

Spanish Expansion

The period during which Spain explored and conquered territories across the Americas and parts of Asia and Africa, from the late 15th through early 17th centuries, significantly extending Spanish influence and power.

Missions

Religious communities or campaigns undertaken with the aim of promoting Christianity in foreign or indigenous territories.

California

A state located on the West Coast of the United States, known for its diverse ecology, large economy, and significant cultural influence.

Cultural Identity

A person's or group's sense of belonging or identity within a particular culture, influenced by traditions, language, religion, and social practices.