Consider the Following to Answer the Question(s) Below

question 8

Multiple Choice

Consider the following to answer the question(s) below:
An investor has $10,000 to invest for one year. The choices for the placement of the funds include stocks, bonds, and mutual funds. The outcome of the investment however, will depend on the economic climate during the year. The table presents the payoffs in dollars for three possible economic scenarios. Forecasts suggest that the probability of a slowdown is 0.25, of no change is 0.50, and of growth is 0.25.
Action Economic Climate

-The expected value of mutual funds is

• A) $525.
• B) $150.
• C) $600.
• D) $1,150.
• E) $925.