Search your own life experiences for examples risk-reward trade-offs and diversification benefits that have nothing...
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Finance
Search your own life experiences for examples risk-reward trade-offs and diversification benefits that have nothing to do with financial investing.
Respond to ALL of the following:
Describe a situation in which you compared the upside risk (possible good outcome) to the downside risk (possible bad outcome) of a decision.
How good was the upside? How bad was the downside?
What outcome was most likely? How did you estimate the probability of each potential outcome?
How did you ultimately decide whether the possibility of the downside risk was worth the reward of the probable outcome?
Describe a situation in which the NUMBER of things you had (e.g. friends, toys, hobbies) directly affected the IMPACT of a bad outcome.
What was the thing in question? (e.g. "I had only two friends")
What was the outcome? (e.g. "They were both assigned to the other 3rd grade class")
How were you affected by sufficient/insufficient diversification? (e.g. "I was very lonely in 3rd grade")
How would a different level of diversification have affected you? (e.g. "If I had had more friends, at least one of them would probably have been in my class and I would have been less lonely")
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