Illustrate financial company current contingent endowment

Reference no: EM131974323

Question: A financial company holds an asset portfolio that will pay a return of $2 million if the US housing market expands and a return of Si million if the US housing market contracts.

a) In an X/Y diagram where you measure returns if the US housing market expands (good state of nature) along the vertical axis and returns if the US housing market contracts along the horizontal axis illustrate the financial company's current contingent endowment.

Reference no: EM131974323

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