An Investor Estimates the Expected Return of Option a to Be

question 6

Multiple Choice

An investor estimates the expected return of option A to be $180,000 and its expected utility to be 400.The expected return of option B is $120,000,and its expected utility is 450.The investor should:

• A)select option A because it has the higher expected return.
• B)select option B because it has the higher expected utility.
• C)select option A because 180,000/120,000 > 450/400.
• D)be indifferent between option A and option B.
• E)re-analyze the values of expected returns.

---

Definitions:

Anaphylactic

A severe and rapid multisystem allergic reaction.

Chemical Substance

A form of matter with constant chemical composition and characteristic properties, distinct from mixtures or mechanical blends.

Chemical Burn

Tissue damage caused by contact with chemicals, leading to irritation or destruction of the skin.

Acids

Chemical substances that release hydrogen ions in water and have a pH less than 7, often characterized by a sour taste and the capability to turn litmus paper red.