A young couple has $5,000 to invest in either savings bonds or a real estate deal. The

Question:

A young couple has $5,000 to invest in either savings bonds or a real estate deal. The on each investment, given good and bad economic conditions, is shown in the following payoff table:

The expected value of investing in savings bonds is $1,000, and the expected value of the real estate investment is $5,200. However, the couple decides to invest in savings bonds. Explain the couple's decision in terms of the utility they might associate with each investment.

Expected Return
The expected return is the profit or loss an investor anticipates on an investment that has known or anticipated rates of return (RoR). It is calculated by multiplying potential outcomes by the chances of them occurring and then totaling these...