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Question

Ray Crofford is evaluating investment alternatives for the $100,000 which he inherited from his grandfather. His investment advisor has identified four alternatives and constructed the following table which shows expected profits (in $10,000's) for various market conditions and their probabilities.

 Market Condition
Investment Bull (.5) Neutral (.3) Bear (.2)
T-Bills 3 3 3
Stocks 21 11 -30
Bonds 15 4 -3
Mixture 13 6 -10

If Ray uses the EMV criterion, the appropriate choice is ________.
a) T-Bills
b) Stocks
c) Bonds
d) Mixture
e) Bank CD's

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