An investor is considering a $25,000 investment in a start-up company. She estimates that she has...
An investor is considering a $25,000 investment in a start-up company. She estimates that she has probability 0.25 of a $15,000 loss, probability 0.1 of a $20,000 loss, probability 0.2 of a $30,000 profit, and probability 0.45 of breaking even (a profit of $0). What is the expected value of the profit?
A. $11,750
B. $11,500
C. $250
D. -$1667
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An investor is considering a $25,000 investment in a start-up
company. She estimates that she has...
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thank you so much for your help! have a great day and be safe <3 QUESTION...
thank you so much for your help!
have a great day and be safe <3
QUESTION 18 An investor is considering a $25,000 investment in a start-up company. She estimates that she has probability 0.2 of a $15,000 loss, probability 0.15 of a $20,000 loss, probability 0.05 of a $40,000 profit, and probability 0.6 of breaking even (a profit of $0). What is the expected value of the profit? $8,000 $1,667 $11,000 -$4,000 QUESTION 19 For the event described below,...
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Describe, using first and second derivatives, her attitude toward risk? Briefly explain. She is currently earning...
Describe, using first and second derivatives, her attitude
toward risk? Briefly explain.
She is currently earning 10% on her £200,000 in a risk free
investment. She has the choice of investing in a project that has a
40% probability of yielding a return of £30,000 return on her
investment and a 60% probability of yielding $10,000 return on her
investment. Will she be better off if she moved her £200,000 to the
risky project? Explain.
QUESTION ONE a) A retired...
1. a. Two investors, A and B, are evaluating the same investment opportunity, which has an expected value of £100. The u...
1. a. Two investors, A and B, are evaluating the same investment opportunity, which has an expected value of £100. The utility functions of A and B are ln(x) and x2, respectively. Which investor has a certainty equivalent higher than 100? Which investor requires the higher risk premium? b. (i) Describe suitable measures of risk for ‘loss-aversion’ and ‘risk aversion’. (ii) Concisely define the term ‘risk neutral’ with respect to a utility function u (w), where w is the realisation...
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please show the steps 7 Bingley Inc. is a start-up company that produces smart notebooks for...
please show the steps
7 Bingley Inc. is a start-up company that produces smart notebooks for elementary school children. In the first year of operation, they sold 20,000 notebooks but incurred a loss of $20,000. They are trying to see if they should make some changes in their operation. 1 Lower the selling price from $20 to $17. 2 Keep the variable cost per unit at $10 per unit 3 Increase the advertising expense by $12,000. Bingley expects that the...
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thank you so much for your help!
have a great day and be safe <3
QUESTION 18 An investor is considering a $25,000 investment in a start-up company. She estimates that she has probability 0.2 of a $15,000 loss, probability 0.15 of a $20,000 loss, probability 0.05 of a $40,000 profit, and probability 0.6 of breaking even (a profit of $0). What is the expected value of the profit? $8,000 $1,667 $11,000 -$4,000 QUESTION 19 For the event described below,...
5. An investor is deciding whether to build a retail store. If she invests in the store and it is successful, she expects a return of $100,000 in the first year. If the store is not successful, she will suffer a loss of $80,000. She guesses that the probability that the store will be a success is 0.6. To remove some of the uncertainty from this decision, the investor tries to establish more information, but this market research will cost...
Describe, using first and second derivatives, her attitude
toward risk? Briefly explain.
She is currently earning 10% on her £200,000 in a risk free
investment. She has the choice of investing in a project that has a
40% probability of yielding a return of £30,000 return on her
investment and a 60% probability of yielding $10,000 return on her
investment. Will she be better off if she moved her £200,000 to the
risky project? Explain.
QUESTION ONE a) A retired...
5. Management of Seagate Technologies is considering the investment of $350 million in manufacturing capacity, start-up costs, and net working capital to exploit a unique new technology. The effectiveness of the new technology-developed at a total cost of $80 million - remained highly uncertain... During the project's expected fifteen-year life, free cash flows were forecast at anywhere from $0 per year to $98 million per year. Management believed that the effectiveness of the technology would be known by the end...
please show the steps
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