An investor is looking at three possible investments: growth stock,blue chip stock,or municipal bonds.The investment performance will vary depending on the investment market condition of Bull (market rising),flat,or Bear (market falling).The investment return for each investment for the corresponding market conditions is given below: $$\begin{array} { | l | l | l | l | }
\hline & \text { Bull } & \text { Flat } & \text { Bear } \
\hline \text { Growth Stock } & 20 & 1 & - 6 \
\hline \text { Blue Chip } & 9 & 8 & 0 \
\hline \text { Bonds } & 4 & 4 & 4 \
\hline
\end{array}$$
Which investment would the investor select if the maximin criterion is used?
A)Growth Stock
B)Blue Chip
C)Bonds

Question

An investor is looking at three possible investments: growth stock,blue chip stock,or municipal bonds.The investment performance will vary depending on the investment market condition of Bull (market rising),flat,or Bear (market falling).The investment return for each investment for the corresponding market conditions is given below: $$\begin{array} { | l | l | l | l | } 
\hline & \text { Bull } & \text { Flat } & \text { Bear } \
\hline \text { Growth Stock } & 20 & 1 & - 6 \
\hline \text { Blue Chip } & 9 & 8 & 0 \
\hline \text { Bonds } & 4 & 4 & 4 \
\hline
\end{array}$$
Which investment would the investor select if the maximin criterion is used?
A)Growth Stock
B)Blue Chip
C)Bonds

Quizplus · Accepted Answer

The maximin criterion involves selecting the option with the highest minimum payoff. For Growth Stock, the minimum is -6; for Blue Chip, it's 0; and for Bonds, it's 4. Therefore, Bonds have the highest minimum payoff.

An Investor Is Looking at Three Possible Investments: Growth Stock,blue