The johnsons have a second home that was available to rent for three full weeks (28 days) during the summer. of the twenty eight days, the johnsons rented it to unrelated tenants for 16 days at fair market value. in addition, the johnsons rented the home to the florians for four days. because they are family friends, the florians only paid half the market rate for the rent. the johnsons also rented the home for five days to the smiths. the smiths paid full fair market value rent even though they are related to the johnsons. how many days did the johnsons use the home for rental purposes during the year? a. 16
b. 20
c. 21
d. 25
e. 28

Your company is starting a new r& d initiative: a development of a new drug that dramatically reduces the addiction to smoking. the expert team estimates the probability of developing the drug succesfully at 60% and a chance of losing the investment of 40%. if the project is successful, your company would earn profits (after deducting the investment) of 9,000 (thousand usd). if the development is unsuccessful, the whole investment will be lost -1,000 (thousand usd). your company's risk preference is given by the expected utility function: u(x) v1000 +x, where x is the monetary outcome of a project. calculate the expected profit of the project . calculate the expected utility of the project . find the certainty equivalent of this r& d initiative . find the risk premium of this r& d initiative e is the company risk-averse, risk-loving or risk-neutral? why do you think so?