(Choose 1 answer)
(See picture)
There are two houses with almost identical characteristics available for investment in two different neighborhoods with drastically different demographic composition. The anticipated gain in value when the houses are sold in 10 years has the following probability distribution
Returns
A. $5,125
B. $ 22,050
C. None of the other choices is correct
D. $ 20,425
E. $2,392
Probability
Neighborhood
Neighborhood
0.25
0.40
$22.500
$30.500
$10,000
$25.000
0.35
$40.500
$10.500
If you can invest 30% of your money on the house in neighborhood A and the remaining on the house in neighborhood B, what is the portfolio expected return of your investment?
8
