You have $1,000 to invest and are considering buying some combination of the shares of two companies, Donkey Inc and Elephant Inc. Shares of Donkey Inc will pay a 10 percent return if the Democrats are elected, an event you believe to have a 60 percent probability; otherwise the shares pay a zero return. Shares of Elephant Inc will pay 8 percent if the Republicans are elected (a 40 percent probability), zero otherwise. Either the Democrats or the Republicans will be elected. a) What is your expected return if you invest $500 in each stock? (Hint: Consider what your return will be if the Democrats win and if the Republicans win, then weight each outcome by the probability that event occurs.)
b) Devise an investment strategy that is riskless, that is, one in which the return on your $1,000 does not depend at all on which party wins.
Invest $ in ElephantInc and $ in DonkeyInc.

answer; i believe the correct answer is radioactive decay);

answeraccounts;

of the three mortgage options that demarco and tanya have to choose from, the balloon payment mortgage would be their best option, over adjustable payment and fixed payment plans.ultimately, the balloon payment plan would save demarco and tanya overall, in interest, would cost less monthly, and they would only have to make these payments for 8 years, opposing to 30 years for adjustable or fixed payment plans. 

overall, demarco and tanya would save $80,811 if they chose balloon payments over fixed payments, and would save $116,711 if they choose balloon payments over adjustable payments. benefits with choosing fixed payments over adjustable payments is that, in the end, the payments will still be $836.30 a month, while with adjustable payments, the initial monthly payments will be $763.38 to $1082.70 a month, ultimately leading to a more costly purchase. benefits with choosing fixed payments over balloon payments are not present. benefits in choosing adjustable payments over is that it has a lower interest rate, and starts with lower monthly payments initially. benefits in choosing adjustable payments over balloon payments include a lower interest rate, and lower initial monthly payments. benefits in choosing balloon payments over fixed payments include lower interest rates, lower overall price, lower monthly payments, takes less time to pay off, and does not require a downpayment. benefits in choosing balloon payments over adjustable payments include, lower monthly payments (when averaged), takes less time to pay off, and lower overall price.

hence, option c, balloon payments, is the best option for demarco and tanya to make this purchase, for it will save them a minimum of $80811, and a maximum of $116,711. 

paying attention to the details