(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
A. $ 22,050
B. $ 2,392
C. $ 20,425
D. None of the other choices is correct
Returns
Probability
Neighborhood
Neighborhood
0.25
$22.500
$30.500
0.40
$10,000
$25.000
0.35
$40.500
$10.500
E. $ 5,125
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?
E42
