I need help on number 2 and 5. Thank you. Questions 1 – 4 refer to...
I need help on number 2 and 5. Thank you.
Questions 1 – 4 refer to prospects X and Y below, as well as the following information x = ($0,0.25;$50,0.50;$100,0.25) y = ($20,0.25;$50,0.50;$80,0.25) Mark has utility of wealth given by u(x)=x^0.4
1.) What is the expected value of prospect X (EV(X))?
2.) What is the standard deviation of prospect X (SD(X))? Round your answer to the nearest cent, and don’t worry, I’ll include a healthy margin of error so you won’t get this wrong due to rounding).
3.) What is the value of the expected utility of Y for Mark (EU(Y))?
4.) How much more is Mark willing to spend to acquire Y than to acquire X (so, what is the value of CE(Y)-CE(X))? (Hint: If u(x)=x^0.4, the u^-1(x)=x^2.5)
5.) Prospect Z is given by Z= ($22,0.25;$40,0.40;$68,p). What is the value of p?
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I need help on number 2 and 5. Thank you.
Questions 1 – 4 refer to...
Questions 1 – 4 refer to prospects X and Y below, as well as the following...
Questions 1 – 4 refer to prospects X and Y below, as well as the following information x = ($0,0.25;$50,0.50;$100,0.25) y = ($20,0.25;$50,0.50;$80,0.25) Mark has utility of wealth given by u(x)=x^0.4 1.) What is the expected value of prospect X (EV(X))? 2.) What is the standard deviation of prospect X (SD(X))? Round your answer to the nearest cent, and don’t worry, I’ll include a healthy margin of error so you won’t get this wrong due to rounding). 3.) What is...
Questions 1 – 4 refer to prospects X and Y below, as well as the following...
Questions 1 – 4 refer to prospects X and Y below, as well as the following information ?? = ($0, 0.50; $40, 0.25; $100, 0.25) ?? = ($0, 0.25; $40, 0.50; $60, 0.25) Mark has utility of wealth given by ?(?) = ?^0.6 1. What is the expected value of prospect X (?V(?))? 2. What is the standard deviation of prospect X (SD(?))? (Round your answer to the nearest cent, and don’t worry, I’ll include a healthy margin of error...
I'm stuck on problem 3 and 4. Thank You. Questions 1-5 refer to prospects X and...
I'm stuck on problem 3 and 4. Thank You.
Questions 1-5 refer to prospects X and Y below, as well as the following information X ($0,0.25; $50,0.50; $100,0.25) Y($20,0.25; $50,0.50$80,0.25) Mark has utility of wealth given by u(x) -x04 I. What is the expected value of prospect X (EVCax))? 2. What is the standard deviation of prospect X (SD(X))? (Round your answer to the nearest cent, and don't worry, Гії include a healthy margin of error so you won't get...
Questions 5-7 ask you to consider risky prospects Y and Z, below: Y Z ($40, 0....
Questions 5-7 ask you to consider risky prospects Y and Z, below: Y Z ($40, 0. 75; $60, 0.25) (S0, 0.40; $75,0.60) S. (10 points) Prospect Z is a mean preserving spread of prospect Y. True or False: SD(Z) > SD(Y). 6. (10 points) Jane has a concave utility of wealth function, u(x). Which of the following statements is true? (Hint: Z is a mean preserving spread of Y) a. Jane prefers Y to Z b. Jane prefers Z to...
Questions 1-4 rely on the following prompt Risky Prospect Y is defined as: Y = ($0,...
Questions 1-4 rely on the following prompt Risky Prospect Y is defined as: Y = ($0, 0.25; $8, 0.50; $64, 0.25). Marco's utility of wealth function is given by u(x) = Vx (in case the font is too small, that says "fourth root of x”). 1. What is the value of EV(Y)? 2. What is the value of SD(Y) (the standard deviation of prospect Y (Round to the nearest hundredth). 3. What is the value of EU(Y) for Marco? 4....
Risky Prospect Y is defined as: Y (S0, 0.35; S16, 0.50: $81,0.15). Marco's utility of wealth...
Risky Prospect Y is defined as: Y (S0, 0.35; S16, 0.50: $81,0.15). Marco's utility of wealth function is given by u(x)-Vx (in case the font is too small, that says "fourth root of x"). 1. What is the value of EV(Y)? 2. What is the value of SD(Y (the standard deviation of prospect Y (Round to the nearest hundredth) 3. What is the value of EU(Y) for Marco? 4. What is Marco's certainty equivalent for Y (what is the value...
ONLY ANSWER QUESTION B, C (both c's), F (identifying i, ii, iii) & G. THANK YOU!...
ONLY ANSWER QUESTION B, C (both c's), F (identifying i, ii, iii)
& G. THANK YOU!
dud Jackson has a utility of money function given by U()- y. a) Is Jackson risk averse, risk neutral, or a risk lover? How do you know this? All of Jackson's wealth is in his land and his house; the total value is $1,000,000. With probability 0.4, the house will burn down, and Jackson's remaining wealth will be only the value of the land,...
I need help with this ASAP. Thank you. Alex plays football for a local club in...
I
need help with this ASAP.
Thank you.
Alex plays football for a local club in Kumasi. If he does not suffer any injury by the end of the season, he will get a professional contract with Kotoko which is wealth S10,000.00. If he is injured though he will get a contract as the fitness coach wealth $100.00. The probability of injury is 1 0%. 3. i. Describe the lottery i. What is the expected utility of the lottery if...
1. Why might some prefer a prix fixe (fixed price) dinner costing about the same as an à la carte one (where you pay ind...
1. Why might some prefer a prix fixe (fixed price) dinner costing about the same as an à la carte one (where you pay individually for each item)? (Assume the food is identical.) 2. Consider a person with the following utility function over wealth: u(w) = ew, where e is the exponential function (approximately equal to 2.7183) and w = wealth in hundreds of thousands of dollars. Suppose that this person has a 40% chance of wealth of $100,000 and...
I need help with Question 1.63. Thank You!! 35 Additional Exercises for Chapter 1 1.63. List...
I need help with Question 1.63. Thank You!!
35 Additional Exercises for Chapter 1 1.63. List the elements of the set S = {(x, y) e Z × Z: |x|+ \y| = 3). Plot the corresponding points in the Euclidean xy- plane. 1.64. For A = {1, 2} and B 1.65. For A = {x e R: |x – 1| < 2} and B = {y e R: ly – 4| < 2), give a geometric description of the points-...
I'm stuck on problem 3 and 4. Thank You.
Questions 1-5 refer to prospects X and Y below, as well as the following information X ($0,0.25; $50,0.50; $100,0.25) Y($20,0.25; $50,0.50$80,0.25) Mark has utility of wealth given by u(x) -x04 I. What is the expected value of prospect X (EVCax))? 2. What is the standard deviation of prospect X (SD(X))? (Round your answer to the nearest cent, and don't worry, Гії include a healthy margin of error so you won't get...
Questions 5-7 ask you to consider risky prospects Y and Z, below: Y Z ($40, 0. 75; $60, 0.25) (S0, 0.40; $75,0.60) S. (10 points) Prospect Z is a mean preserving spread of prospect Y. True or False: SD(Z) > SD(Y). 6. (10 points) Jane has a concave utility of wealth function, u(x). Which of the following statements is true? (Hint: Z is a mean preserving spread of Y) a. Jane prefers Y to Z b. Jane prefers Z to...
Questions 1-4 rely on the following prompt Risky Prospect Y is defined as: Y = ($0, 0.25; $8, 0.50; $64, 0.25). Marco's utility of wealth function is given by u(x) = Vx (in case the font is too small, that says "fourth root of x”). 1. What is the value of EV(Y)? 2. What is the value of SD(Y) (the standard deviation of prospect Y (Round to the nearest hundredth). 3. What is the value of EU(Y) for Marco? 4....
Risky Prospect Y is defined as: Y (S0, 0.35; S16, 0.50: $81,0.15). Marco's utility of wealth function is given by u(x)-Vx (in case the font is too small, that says "fourth root of x"). 1. What is the value of EV(Y)? 2. What is the value of SD(Y (the standard deviation of prospect Y (Round to the nearest hundredth) 3. What is the value of EU(Y) for Marco? 4. What is Marco's certainty equivalent for Y (what is the value...
ONLY ANSWER QUESTION B, C (both c's), F (identifying i, ii, iii)
& G. THANK YOU!
dud Jackson has a utility of money function given by U()- y. a) Is Jackson risk averse, risk neutral, or a risk lover? How do you know this? All of Jackson's wealth is in his land and his house; the total value is $1,000,000. With probability 0.4, the house will burn down, and Jackson's remaining wealth will be only the value of the land,...
I
need help with this ASAP.
Thank you.
Alex plays football for a local club in Kumasi. If he does not suffer any injury by the end of the season, he will get a professional contract with Kotoko which is wealth S10,000.00. If he is injured though he will get a contract as the fitness coach wealth $100.00. The probability of injury is 1 0%. 3. i. Describe the lottery i. What is the expected utility of the lottery if...
I need help with Question 1.63. Thank You!!
35 Additional Exercises for Chapter 1 1.63. List the elements of the set S = {(x, y) e Z × Z: |x|+ \y| = 3). Plot the corresponding points in the Euclidean xy- plane. 1.64. For A = {1, 2} and B 1.65. For A = {x e R: |x – 1| < 2} and B = {y e R: ly – 4| < 2), give a geometric description of the points-...
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