Sophia Finance Challenge 03 answers



You loan a friend $5,000. There is a 15% chance your friend will pay you a 3%

return, a 40% chance he will pay you a 2% return and a 45% chance he will pay

you only a 1% return.

What is your expected return after one year?

a.)

1.80%

b.)

2.05%

c.)

1.70%

d.)

2.20%

Why is it a good idea to diversify an investment portfolio?

a.)

To reduce specific risk.

b.)

To eliminate variance.

c.)

To maximize potential returns.

d.)
...
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