Business, 04.12.2021 23:40, lollipop83
Consider a risk-averse individual who has utility function u(a) which is increasing with u(0) = 0. There are two risky assets: A, B. For A, every dollar invested gives a return of $0 with a probability of 1/3 and $3 with a probability of 2/3. For B, every dollar invested gives a return is $0 with a probability of 1/4 and $3 with a probability of 3/4.
The individual has $120 to invest. Consider two investment choices: (1) invest an entire $120 in A and (2) invest $60 in A, $60 in B.
(a) Draw the diagram of the utility function and show your work, determine the expected utility of the individual from choice 1.
(b) Draw the diagram of the utility function and show your work, determine the expected utility of the individual from choice 2 when return from A is bad.
(c) Draw a diagram of the utility function and show your work, determine the expected utility of the individual from choice 2 when return from A is good.
(d) Draw a diagram of the utility function and show your work, determine the expected utility of the individual from choice 2.
(e) Comparing expected utility from choices 1,2 in a diagram, determine which choice is better.
Answers: 1
Business, 22.06.2019 10:30, volleyballfun24
Trecek corporation incurs research and development costs of $625,000 in 2017, 30 percent of which relate to development activities subsequent to ias 38 criteria having been met that indicate an intangible asset has been created. the newly developed product is brought to market in january 2018 and is expected to generate sales revenue for 10 years. assume that a u. s.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with ifrs. thus, adjustments to convert from u. s. gaap to ifrs must be made. ignore income taxes. required: (a) prepare journal entries for research and development costs for the years ending december 31, 2017, and december 31, 2018, under (1) u. s. gaap and (2) ifrs. (c) prepare the entry(ies) that trecek would make on the december 31, 2017, and december 31, 2018, conversion worksheets to convert u. s. gaap balances to ifrs.
Answers: 1
Business, 22.06.2019 21:30, dondre54
The year-end financial statements of calloway company contained the following elements and corresponding amounts: assets = $34,000; liabilities = ? ; common stock = $6,400; revenue = $13,800; dividends = $1,450; beginning retained earnings = $4,450; ending retained earnings = $8,400. based on this information, the amount of expenses on calloway's income statement was
Answers: 1
Business, 22.06.2019 22:00, vanessacasillas452
What resourse is both renewable and inexpensive? gold coal lumber mineral
Answers: 1
Consider a risk-averse individual who has utility function u(a) which is increasing with u(0) = 0. T...
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