Instruction 5-5
There Are Two Houses with Almost Identical Characteristics

question 142

Short Answer

Instruction 5-5
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
$$\begin{array} { | c | c | c | } \hline \text { Probability } & \text { Neighbourhood A } & \text { Neighbourhood B } \\\hline .25 & - \$ 22,500 & \$ 30,500 \\\hline .40 & \$ 10,000 & \$ 25,000 \\\hline .35 & \$ 40,500 & \$ 10,500 \\\hline\end{array}$$
-Referring to Instruction 5-5,if you can invest 90% of your money on the house in neighbourhood A and the remaining on the house in neighbourhood B,what is the portfolio expected return of your investment?

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Definitions:

Serous Membrane

A thin tissue that lines certain internal cavities of the body, producing a serous fluid for lubrication.

Pericardial Sac

A double-layered membrane enclosing the heart, providing lubrication and protection against friction.

Pelvic Cavity

A body cavity that is bounded by the bones of the pelvis, containing reproductive organs, the urinary bladder, and the rectum.

Body Cavities

Defined spaces within the body that house organs and other structures, such as the thoracic, abdominal, and pelvic cavities.