Use the Information Below to Answer the Following Questions) -Identify the Average Utility for the Growth Fund Decision

question 40

Multiple Choice

Use the information below to answer the following questions) . Below are four options for an investment decision. $$\begin{array} { | l | l | l | l | } \hline \text { Decision/event } & \text { Rates Rise } & \text { Rates Stable } & \text { Rates Fall } \\\hline \text { Bank CD } & \mathbf { 0 . 8 0 } & 0.80 & 0.80 \\\hline \text { Bond fund } & - 0.75 & 0.86 & 1.50 \\\hline \text { Index fund } & 0.00 & 0.90 & 1.20 \\\hline \text { Growth fund } & - 0.30 & 0.70 & 1.40 \\\hline\end{array}$$
-Identify the average utility for the growth fund decision.

• A) 1.05
• B) 0.70
• C) 0.20
• D) 0.60

---

Definitions:

Federal Trade Commission

A U.S. federal agency established in 1914 to promote consumer protection and the elimination and prevention of anticompetitive business practices.

Legal Cartel Theory

A concept where a group of firms or entities legally agree to control production, pricing, or marketing of goods and services to dominate a market.

Average Total Cost

The total cost of production (fixed and variable costs combined) divided by the number of units produced, indicative of cost per unit.

Price-fixing

An illegal agreement among competitors to set prices at a certain level, rather than letting them be determined naturally by the market.