Mary Beth Is Risk Averse and Has $1,000 with Which

question 60

Multiple Choice

Mary Beth is risk averse and has $1,000 with which to make a financial investment.She has three options.Option A is a risk-free government bond that pays 5 percent interest each year for two years.Option B is a low-risk stock that analysts expect to be worth about $1,102.50 in two years.Option C is a high-risk stock that is expected to be worth about $1,200 in four years.Mary Beth should choose

• A)option A.
• B)option B.
• C)option C.
• D)either A or B because they are the same to her.

Construct and interpret mathematical models for budget planning and financial forecasting.

Solve practical problems involving dimensions and space requirements according to given regulations.

Understand the concept of percent change and its application to increase or decrease in values.

Understand the concept of breach of warranty and the rights of transferees against transferors in negotiable instruments.

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Definitions:

Stress Tolerance

Capacity to withstand psychological and emotional stress without succumbing to adverse effects.

Resilience

The capacity to recover quickly from difficulties; mental toughness and adaptability in the face of challenges.

Optimism

The tendency to hold a hopeful and positive outlook towards future outcomes.

Flexible

The ability to adapt quickly and effectively to new conditions or situations.