Sarah Alqahtani was just notified by her lawyer that she has inherited 80,000 SAR from her uncle Abdullah and she is considering the following option for investing the money to maximize her return.

What is the expected return of Option 1?

Option 1: Put the money in an interest-bearing checking account that earns 4.2%. The account is ensured against bank failure.

Sarah Alqahtani was just notified by her lawyer that she has inherited 80,000 SAR from her uncle Abdullah and she is considering the following options for investing the money to maximize her return.

What is the expected retrun of Option2?

Option 2: Invest the money in a corporate bond with a stated return of 4%, although there is a 12% chance the company could go bankrupt.

Sarah Alqahtani was just notified by her lawyer that she has inherited 80,000 SAR from her uncle Abdullah and she is considering the following options for investing the money to maximize her return. Suppose she could pay her sister 1,000 SAR to find out extra information about her brother that would indicate with certainty whether he will pay her back. What would be her expected return after she paid her sister but before finding out the extra information about her brother?

Option 3: Loan the money to one of her brothers, at an agreed-upon interest rate of 12%, even though she believes there is a 26% chance that her brother will not repay her.

I only need an answer for Q3

Thank you,

Force Completion This test can be saved and resumed later. Your answers are saved automatically. Question Completion Status: 1 2 3 4 5 6 7 8 Close Window A Moving to another question will save this response. Question 3 of 8 > >> Question 3 1 points Save Answer Sarah Alqahtani was just notified by her lawyer that she has inherited 80,000 SAR from her uncle Abdullah and she is considering the following options for investing the money to maximize her return. Suppose she could pay her sister 1,000 SAR to find out extra information about her brother that would indicate with certainty whether he will pay her back. What would be her expected return after she paid her sister but before finding out the extra information about her brother? Option 3: Loan the money to one of her brothers, at an agreed-upon interest rate of 12%, even though she believes there is a 26% chance that her brother will not repay her. A Moving to another question will save this response. >> Close Window GET W we