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Question

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.

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

If Ray uses the Hurwicz criterion with alpha = 0.9, the appropriate choice is ______.
a) T-Bills
b) Stocks
c) Bonds
d) Mixture
e) None

Answer

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