Apply the Expected-Value Criterion to Choose Between These Investments

question 4

Essay

Apply the expected-value criterion to choose between these investments.
Investment A has possible outcomes: $100,000 (50% chance), $40,000 (30% chance), and $50,000 (20% chance). Investment B has possible outcomes: $150,000, $60,000, $20,000, and $80,000 with each outcome equally likely.

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Definitions:

Id

In psychoanalytic theory, the part of the mind in which innate instinctive impulses and primary processes are manifest.

Superego

In psychoanalytic theory, it represents the ethical component of the personality and provides the moral standards by which the ego operates.

Oedipus Complex

According to Freud, a boy’s sexual desires toward his mother and feelings of jealousy and hatred for the rival father.

Identification

The process by which, according to Freud, children incorporate their parents’ values into their developing superegos.