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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.)
...
Sophia Finance Challenge 03 answers
Last document update:
ago
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.)
...
Sophia Finance Challenge 01 answers



The primary purpose of finance is to __________.

a.)

manage assets in a way that maximizes returns

b.)

keep track of a business's cash flow

c.)

study the effects of the economy on businesses

d.)

pay off debt as quickly as possible

Finance is the study of fund management and ___________.

a.)

credit

b.)

economics

c.)

accounting

d.)

asset allocation

Corporate finance focuses primarily on decisions related to _________...
Sophia Finance Challenge 01 answers
Last document update:
ago
Sophia Finance Challenge 01 answers



The primary purpose of finance is to __________.

a.)

manage assets in a way that maximizes returns

b.)

keep track of a business's cash flow

c.)

study the effects of the economy on businesses

d.)

pay off debt as quickly as possible

Finance is the study of fund management and ___________.

a.)

credit

b.)

economics

c.)

accounting

d.)

asset allocation

Corporate finance focuses primarily on decisions related to _________...
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