SCENARIO 5-11
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:
-Referring to Scenario 5-11, 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?

Question

SCENARIO 5-11
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: 
-Referring to Scenario 5-11, 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?

Quizplus · Accepted Answer

The Answer of SCENARIO 5-11
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: 
-Referring to Scenario 5-11, 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?

SCENARIO 5-11 There Are Two Houses with Almost Identical Characteristics Available for Available