Business, 02.08.2021 19:10 blacee01

Suppose you have just inherited $10,300 and are considering different options for investing the money to maximize your return. If you are risk-neutral (that is, neither seek out or shy away from risk), which of the following options should you choose to maximize your expected return? A. Invest the money in a corporate bond, with a stated return of 6%, but there is a chance of 1 1% the company could go bankrupt
B. Hold the money in cash and earn zero return.
C. Put the money in an interest-bearing checking account, which earns 1%. The FDIC insures the account against bank failure.
D. Loan the money to one of your friends' roommates, Mike, at an agreed upon interest rate of 7%, but you believe there is a 7% chance that Mike will leave town without repaying you.

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