Your Investment Has a 20% Chance of Earning a 30

question 50

Multiple Choice

Your investment has a 20% chance of earning a 30% rate of return, a 50% chance of earning a 10% rate of return, and a 30% chance of losing 6%. What is your expected return on this investment?

• A) 12.8%
• B) 11%
• C) 8.9%
• D) 9.2%

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Definitions:

Apparent Authority

The perception by a third party that an agent has the authority to act on behalf of a principal, even if such authority has not been explicitly or implicitly granted.

Principal Liable

Refers to the legal responsibility of the principal party in a relationship (such as an employer) for certain actions of their agents or employees under the doctrine of vicarious liability.

Apparent Authority

The impression given to third parties that an agent is authorized to act on behalf of a principal, even if such authority has not been formally granted.

Proper Notification

The act of informing someone through legally accepted or specified means.