Which of the Following Investments Does a Rational Investor Prefer

question 58

Multiple Choice

Which of the following investments does a rational investor prefer?

• A)Investment A: E(
• R)= 10%, = 3%
• B)Investment B: E(
• R)= 10%, = 5%
• C)Investment C: E(
• R)= 11%, = 3%
• D)None of the given options,as a rational investor would require more information from which to make a decision.

---

Definitions:

Materials Purchases

The acquisition of raw materials or supplies required for the production of goods or provision of services.

Payment Discount

A reduction in the invoice amount offered by a seller to the buyer in return for early payment within a specified time frame.

Cash Balance

The amount of cash on hand or in bank accounts, immediately available to a business or individual.

Cash Disbursements

Money paid out by a business in the course of its operations, such as paying for expenses, purchasing assets, or repaying loans.