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

question 130

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 10% 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:

Blood Flow

The continuous circulation of blood in the cardiovascular system, delivering nutrients and oxygen to all cells and removing carbon dioxide and other waste products.

Cerebral Spinal Fluid

Cerebral spinal fluid is a clear, colorless body fluid found in the brain and spinal cord that acts as a cushion, protecting the central nervous system, and plays a role in the exchange of nutrients and waste.

Neoteny

Process in which juvenile stages of predecessors become adult features of descendants; idea derived from the observation that more recently evolved species resemble the young of their common ancestors.

Brain Cells

Cells located in the brain, including neurons and glial cells, responsible for processing information and supporting brain function.