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

question 124

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 70% 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:

Feeling Of Belonging

An emotional state where individuals perceive themselves as integral parts of a system or group.

Individuality

The unique characteristics and qualities that distinguish one person from another.

Confidentiality

The ethical principle or legal right that mandates keeping certain information shared between two parties private and secure.

Life-Threatening

A condition or situation that has the potential to cause death if not immediately addressed or treated.