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:

Super-Ego

The strict and demanding part of the mind.

Ego

In psychoanalytic theory, it represents the part of the mind that mediates between the conscious and the unconscious and is responsible for reality testing and a sense of personal identity.

Unconscious Mind

Refers to the part of the mind that is not currently in focal awareness, containing thoughts, memories, and desires that are not readily accessible but influence behavior.

Pleasure Principle

A concept in psychoanalytic theory that describes the instinctual seeking of pleasure and avoiding of pain to satisfy biological and psychological needs.