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You are going to invest all of your funds in one of three projects with the following distribution of possible returns:
Project 1 Project 2
Standard Deviation 12% Standard Deviation 19.5%
Probability Return Probability Return
50% Chance 20% 30% Chance 30%
50% Chance -4% 40% Chance 10%
30% Chance -20%
Project 3
Standard Deviation 12%
Probability Return
10% Chance 30%
40% Chance 15%
40% Chance 10%
10% Chance -21%
If you are a risk-averse investor,which one should you choose?
Serotonin
A neurotransmitter in the brain that affects mood, emotion, and sleep, playing a key role in mental health.
Dopamine
A neurotransmitter that plays a key role in the brain's reward system and is involved in regulating mood, motivation, and attention.
Schizophrenia
A psychological condition marked by disturbances in cognitive functions, sensory interpretations, affective reactions, and interpersonal relationships.
Interaction
A dynamic process involving two or more entities where actions, behaviors, or processes have an effect upon one another.
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