Question: An individual with a mean-variance utility function is faced with four mutually exclusive investment opportunities; A, B, C and D. The NPV of each investment

An individual with a mean-variance utility function is faced with four mutually exclusive investment opportunities; A, B, C and D.

The NPV of each investment will vary depending on which of three equally likely future scenarios I, ll and Ill applies:

A. I = 100, II = 120, III = 140

B. I = 200, II = 160, III = 0

C. I = 120, II = 150, III = 90

D. I = 170, II = 80, III = 110

Which investment would the individual choose?

1. investment A

2. investment B

3. investment C

4. investment D

An individual with a mean-variance utility function is faced with four mutually exclusive investment opportunities; A, B, C and D. The NPV of each investment will vary depending on which of three equally likely future scenarios I, II and III applies: 1 11 III A. 100 120 140 B. 200 160 0 C. 120 150 90 D. 170 80 110 Which investment would the individual choose? A. investment A B. investment B C. investment C D. investment D

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