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

question 39

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. If Ray uses the maximin criterion,the appropriate choice would be ________.

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

---

Definitions:

Operating Cycle

The duration of time from the acquisition of inventory to the collection of cash from accounts receivable, representing the process of turning assets into cash.

Common Stock

Common stock represents ownership shares in a corporation, granting holders voting rights and a share in the company's profits through dividends.

Market Price

The market rate at which a service or asset is currently available for buying or selling.

Operating Cycle

The average period of time between the purchase of inventory and the collection of cash from receivables, indicating how quickly a company can turn its products into cash.