Suppose You Are an Investor with a Choice Between Three $\quad$

question 3

Multiple Choice

Suppose you are an investor with a choice between three securities that are identical in every way except in terms of their rates of return and risk.Which investment provides the highest expected return?
Investment A: $\quad$ Total return = 10 percent with probability 50 percent
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Total return = 20 percent with probability 50 percent

Investment B: $\quad$ Total return = 12 percent with probability 50 percent
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Total return = 20 percent with probability 50 percent

Investment C: $\quad$ Total return = 5 percent with probability 60 percent
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Total return = 25 percent with probability 40 percent

Investment D: $\quad$ Total return = 5 percent with probability 60 percent
$\quad$$\quad$$\quad$$\quad$$\quad$$\quad$ Total return = 7 percent with probability 40 percent

• A)Investment A
• B)Investment B
• C)Investment C
• D)Investment D

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Definitions:

Passive Voice

A sentence structure in which the subject is the recipient of the action, often used to deflect responsibility or focus attention elsewhere.

"You" Attitude

A communication approach that focuses on and prioritizes the receiver's interests and needs.

Nouns

Words that name people, places, things, or ideas, serving as a basic element of grammar in most languages.

Verbs

Words that express actions, occurrences, or states of being.