45. Suppose that an investor has a choice of four investments (assume that he must choose one, and only one, of the four—he cannot divide his money among them):

A: a savings account in a bank.

B: a stock which moves counter to the general stock market.

C: a growth stock wThich moves at a faster pace than the market.

D: a second growth stock which is similar to C but not quite as speculative.

The investor has decided that his payoff depends on his choice of investment and on the next year’s change in the Dow-Jones Industrials (DJI), which we shall call 0. (Ignore the fact that he should be interested in the change in price of the investments themselves—for example, by assuming perfect cor¬

relations between the DJI and the investments). His payoff functions are as follows: