Ray Crofford Is Evaluating Investment Alternatives for the $100,000 Which

question 44

Multiple Choice

Ray Crofford is evaluating investment alternatives for the $100,000 which he inherited from his grandfather. His investment advisor has identified two alternatives and constructed the following tables which show (1) expected profits (in $10,000's) for various market conditions and their probabilities,and (2) the advisor's track record on predicting Bull and Bear markets. If the advisor predicts a Bear market the EMV of the Bonds alternative,using revised probabilities,is ________.

• A) $36,600
• B) $24,600
• C) $56,800
• D) $48,200
• E) $45,800

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