A Probability Experiment Has Two Steps

question 44

Multiple Choice

A probability experiment has two steps. There are two possible results for the first step, call them "A" and "B". If the result for the first step was "A", then there would be 4 possible results for the second step. If the result for the first step was "B", then there would be 15 possible results for the second step. How many possible outcomes are there for this experiment?

• A) 60
• B) 9
• C) 15
• D) 19

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Definitions:

Risk-free Interest Rate

The theoretical return on investment with zero risk of financial loss, typically associated with government bonds.

Total Risk

The sum of all risks affecting an investment, including both systematic (market) and unsystematic (individual) risks.

Systematic Risk

The danger associated with the overall market or a specific sector of the market that cannot be mitigated by spreading investments.

Capital Asset Pricing Model

A model used to determine the theoretical rate of return of an asset, considering the asset’s risk relative to that of the market.