Ray Crofford Is Evaluating Investment Alternatives to Invest $100,000 Which $\quad$

question 60

Multiple Choice

Ray Crofford is evaluating investment alternatives to invest $100,000 which he inherited from his grandfather.His investment advisor has identified four alternatives and constructed the following payoff table which shows expected profits (in $10,000's) for various market conditions. $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\quad$$\text { Market Condition }$
$\begin{array}{|c|c|c|c|}\hline \text { Investment } & \text { Bull } & \text { Neutral } & \text { Bear } \\\hline \text { T-Bills } & 3 & 3 & 3 \\\hline \text { Stocks } & 21 & 11 & -30 \\\hline \text { Bonds } & 15 & 4 & -3 \\\hline \text { Mixture } & 13 & 6 & -10 \\\hline\end{array}$

If Ray uses the Hurwicz criterion with alpha = 0.9, the appropriate choice is ______.

• A)T-Bills
• B)Stocks
• C)Bonds
• D)Mixture
• E)None

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Definitions:

Phagocytize

The process by which certain living cells called phagocytes ingest or engulf other cells or particles.

Cnidarians

Phylum of animals that have stinging cells called cnidocytes, two tissue layers, and radial symmetry; include hydras and jellyfish.

Medusa

A free-swimming or floating stage in the life cycle of some cnidarians, typically having a bell-shaped body and tentacles.

Gastrovascular Cavity

A central digestive cavity with a single opening that functions as both mouth and anus; characteristic of cnidarians and flatworms.