Use the Following to Answer Questions

question 74

Multiple Choice

Use the following to answer questions :
Scenario: Diversification
Morris is considering investing $10 000 in a sunglass company or a rain poncho company.If it is a rainy year and he invests only in the sunglass company,he will lose $5 000.However,if it is a rainy year and he invests only in the rain poncho company,he will earn $10 000.If it is a sunny year and he invests only in the sunglass company,he will earn $10 000;if he invests only in the rain poncho company,he will lose $5 000 in a sunny year.There is a 50% chance of a sunny year and a 50% chance of a rainy year.
-(Scenario: Diversification) Use Scenario: Diversification.If Morris invests all of his money in the rain poncho company,what is his expected gain or loss?

• A) a loss of $2 500
• B) to break even
• C) a gain of $2 500
• D) a gain of $10 000

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Definitions:

Psychology Laboratory

A controlled setting designed for the study and experimental investigation of psychological phenomena and behaviors.

Wundt

Wilhelm Wundt, often considered the father of experimental psychology, who established the first psychological laboratory in Leipzig, Germany.

1879

The year that marks the beginning of experimental psychology when Wilhelm Wundt established the first psychological laboratory in Leipzig, Germany.

Functionalism

A theoretical framework in psychology that focuses on the purpose and function of behavior and mental processes.