Consider the Following Two Investment Alternatives: First, a Risky Portfolio

question 6

Multiple Choice

Consider the following two investment alternatives: First, a risky portfolio that pays a 15% rate of return with a probability of 40% or a 5% rate of return with a probability of 60%. Second, a Treasury bill that pays 6%. The risk premium on the risky investment is ________.

• A) 1%
• B) 3%
• C) 6%
• D) 9%

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Definitions:

Organizational Stakeholders

Individuals or groups that have an interest, stake, or investment in the success and operations of an organization, including employees, customers, investors, and suppliers.

Behaviour

This encompasses the actions or reactions of an individual or group, often in response to their environment or stimuli.

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The act of carrying out a task or function, often evaluated against known standards or objectives.

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A measure of an organization's performance in various areas of social responsibility.