Investment Categories

1. Least amount of risk

4, 6, 2, 3, 5, 1

The savings account has the least amount of risk because you will always earn interest on your money and your money is backed by the FDIC. The gambling trip has the most risk because, well, its gambling and there is no guarantee that you will keep your money let alone increase your investment. The baseball and Whitecaps are also somewhat risky because the value of the baseball may vary depending on what the buyer is willing to pay and the Whitecaps may make some bad decisions and the value of them goes down.

2. Greatest expected return

1, 5, 3, 2, 4, 6

The gambling has the greatest expected return because you can make a significant amount of money gambling, although it is very risky. The promise from GE has the least expected return because you will only earn $56.30 every year. The savings account also has a low expected return but since you are putting $400,000 into the savings account, you can make a couple thousand dollars a year off interest which makes it better than the GE promise.

3. Most liquid

4, 2, 1, 3, 6, 5

The savings account is the most liquid because it is easily turned into cash and has a very small chance to lose value. The Whitecaps ownership is the least liquid because it is not easily turned into cash and it has a risk of losing value. The GE promise is also not very liquid because it is a 21 year promise and the money can't be touched before then without a penalty or fee.

4. Easiest to manage

4, 6, 1, 2, 3, 5

The savings account is the easiest to manage because once you put the money in the account, you don't have to manage it until you want to take it out. The Whitecaps would be the hardest to manage because you are partial owner of the business and therefore might be required to make some business decisions. The GE promise is also easy to manage because you don't really need to do anything once the promise is made. The baseball, on the other hand, is harder to manage because you need to know when to sell it and you have to find a buyer to sell it to.

5. Transaction costs

-choice 4, the savings account, has a low transaction cost because you can put your money into the account with no initial costs

-choice 3, the baseball,