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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

For the 'T-Bills' and 'Bonds' choices, the indifference value of Hurwicz's alpha is _____.
a) 0.8267
b) 0.7134
c) 0.6555
d) 0.3333
e) 0.5000

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