Question

2. Consider the following lotteries: (L1) $5000 for sure; (L2) a 1/10 chance of $30,000 and...

2. Consider the following lotteries: (L1) $5000 for sure; (L2) a 1/10 chance of $30,000 and a 89/100

chance of $5000 (and a 1/100 chance of nothing); (L3) a 11/100 chance of $5000 (and a 89/100

chance of nothing); and (L4) a 1/10 chance of $30,000 (and a 9/10 chance of nothing). Are the

preferences L1 ≻ L2 and L4 ≻ L3 consistent with the independence axiom? (Assume that the preference relation is continuous.)

0 0
Add a comment Improve this question Transcribed image text
Know the answer?
Add Answer to:
2. Consider the following lotteries: (L1) $5000 for sure; (L2) a 1/10 chance of $30,000 and...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Question 2: Lottery basics Consider the following four lotteries. $200,000 0.5 $100,000 L2 L1 -$1,000 0.6...

    Question 2: Lottery basics Consider the following four lotteries. $200,000 0.5 $100,000 L2 L1 -$1,000 0.6 s65,000 0.5 L3 $30.000 0.4 $30,000 Anıswer the following questions (a) Based on your preferences and the utility you perceive, rank the four lotteries. (b) Based on your answer in part (b), calculate 1/2, 14, and ra (c) Using ro, T1/4, 1/2, Ts/a, and Fı, draw a curve that fits your utility. From observation, are you risk-seeking, risk-neutral, or risk-averse? What is your risk...

  • Consider the Producer-Consumer problem Assume that there are 2 producers (P1 and P2) and 1 consumer...

    Consider the Producer-Consumer problem Assume that there are 2 producers (P1 and P2) and 1 consumer (C1). The maximum number of items in the queue is 100. Consider the following solution The functions qfull enque and deque are the standard functions discussed in class Assume they have been implemented correctly by one of the methods Semaphore ni=0, mutex=1; /* ni= number of items currently in the queue.*/ /* mutex is used to provide critical section. */ Code of a Producer...

  • Consider the following extensive form game P1 RP:2 L2 R2 L1 R1 (2,2) (0,3) 1. How many sub-games are there in this game...

    Consider the following extensive form game P1 RP:2 L2 R2 L1 R1 (2,2) (0,3) 1. How many sub-games are there in this game? What is the Subgame Perfect Equilibrium? 2. Represent this game as a Normal form game and find all pure strategy Nash Eq. Is there a mixed Nash eq. in this game? If yes, show one. If not, argue why not 3. Now assume that P2 cannot observe P1's action before he makes his move. As such, he...

  • 2.- Prepare the required-journal entries-in-good-format-below the following-boxof- information.---If-no-entry-is-required, make sure to note this.- 1 11 1...

    2.- Prepare the required-journal entries-in-good-format-below the following-boxof- information.---If-no-entry-is-required, make sure to note this.- 1 11 1 EVENTH DATEN TRANSACTION- 11 Jan 11 You give your business $1000 for 1000-shares in the business 201 Jan 11 Your monthly rent is $1000.--The-rent-is due on the first day of each month.-- 3 Jan 5 You-hire two personal trainers-for-$5000 each per month. The trainers-are-paid-on the last day of each month. 40 Jan-311 Company provides personal training-to-5-customers during the month. The bill to these: customers...

  • Consider a sample with 10 observations of 11, –3, 8, 8, 10, 1, –2, 13, 8,...

    Consider a sample with 10 observations of 11, –3, 8, 8, 10, 1, –2, 13, 8, and –4. Use z-scores to determine if there are any outliers in the data; assume a bell-shaped distribution. (Round your answers to 2 decimal places. Negative values should be indicated by a minus sign.)   The z-score for the smallest observation      The z-score for the largest observation      There are outliers or no outliers in the data. The historical returns on a portfolio had...

  • Consider a sample with 10 observations of 11, –3, 8, 8, 10, 1, –2, 13, 8,...

    Consider a sample with 10 observations of 11, –3, 8, 8, 10, 1, –2, 13, 8, and –4. Use z-scores to determine if there are any outliers in the data; assume a bell-shaped distribution. (Round your answers to 2 decimal places. Negative values should be indicated by a minus sign.)   The z-score for the smallest observation      The z-score for the largest observation      There are outliers or no outliers in the data. The historical returns on a portfolio had...

  • Time Value of Money Spreadsheet Example 4 Module IV Name: Date: 6 7 8 Question 1 9 Question 2 10 Question 3 11 Question...

    Time Value of Money Spreadsheet Example 4 Module IV Name: Date: 6 7 8 Question 1 9 Question 2 10 Question 3 11 Question 4 12 Question 5 13 Question 6 14 Question 7 15 Question 8 16 Question 9 17 Question 10 18 19 20 Single Amount or Annuity 21 Periodic Interest Rate 22 Number of Periods 23 24 25 Present Value of Single Amount 26 27 Future Value of Single Amount 28 29 Future Value of An Annuity...

  • I need help on question 2. MODULE IV: TIME VALUE OF MONEY INTRODUCTION The time value...

    I need help on question 2. MODULE IV: TIME VALUE OF MONEY INTRODUCTION The time value of money analysis has many a lysis has many applications, ranging from setting hedules for paying off loans to decisions about whether to invest in a partie financial instrument. First, let's define the following notations: I = the interest rate per period Na the total number of payment periods in an annuity PMT = the annuity payment made each period PV = present value...

  • Answer questions above 16-1 Balance Sheet and Income Statement The Wrangle Company had the following items...

    Answer questions above 16-1 Balance Sheet and Income Statement The Wrangle Company had the following items on its December 31, 20X0, balance sheet and 20X0 income statement (in dollars except for number of shares outstanding Cash and equivalents $ 56,000 Revenues 699,000 Notes payable 45,000 Long-term debt, excluding current portion 199,000 Accounts receivable, net 48,000 Provision for income taxes 62,000 Other long-term assets 105,000 Total Shareholder Equity Interest expense 62,000 Deferred income tax liability-long-term 47,000 Retained earnings 201,000 Income taxes...

  • Ch 1 1. Given the following dat Dec 31 Year 2 Dec 31 Year 1 Total...

    Ch 1 1. Given the following dat Dec 31 Year 2 Dec 31 Year 1 Total liabilities S128,250 $120,000 Total stockholders oquity 95.000 80.000 compute the ratio of liabilities to stockholders' equity for each year Round to two decimal places 1.50 and 107, 11.35 and 1.50 respectively respectively 1.07 and 1.19. 1.1.19 and 1.35 respectively respectively The liabilities and stockholder's equity of a company are $132,000 and $244.000, respectively. Assets should equal SS188.00 $132.00 p $376,00 12.000 A financial statement...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT