Risk averse-risk loving and risk neutral

Assignment Help Business Economics
Reference no: EM13996127

Lakisha has a utility function for income given by U(I)=√I. Lakisha is ___ (risk averse/risk loving/risk neutral).

Lakisha is considering an investment that would give her an income of $10,000 with a probability of .5 or an income of $20,000 with a probability of .5. The expected utility of this investment is___. (Answer to two decimal places.)

Lakisha is also considering a safe investment that returns a certain income of $14,000. Given her utility function, Lakisha would prefer the investment with ____ (uncertain/certain) income.

Reference no: EM13996127

Questions Cloud

Prepare the journal entry to record the sale : Suppose Moody's bond rating agency downgraded the risk rating of the bonds motivating Tanner-UNF to sell the investment on January 2, 2012, for $190 million. Prepare the journal entry to record the sale.
Which of the following solvent pairs : Which of the following solvent pairs could be used in a solvent pair recrystallization (in general, not for this specific reaction)? For those selected, briefly explain why. For those not selected, briefly explain why not.
The nominal return on your investment : At the beginning of the year, you bought 100 shares of Microsoft common stock for $105, and over the course of the year, the company paid a dividend of $6 per share. At the end of the year, you sell your 100 shares for $95. The inflation rate for the..
Would toluene be suitable for a single solvent : Would toluene be suitable for a single solvent recrystallization of 4-bromoacetanilide? Why or why not? Please be specific in your explanation (hint: your explanation should focus on polarity of all relevant compounds and solvents).
Risk averse-risk loving and risk neutral : Lakisha has a utility function for income given by U(I)=√I. Lakisha is ___ (risk averse/risk loving/risk neutral). Lakisha is considering an investment that would give her an income of $10,000 with a probability of .5 or an income of $20,000 with a p..
How do you draw the chemical equation : How do you draw the chemical equation including the transition state for Sn1 and Sn2 reactions for (CH3)3 - OH + HX and CH3(CH2)3(OH) + HX ?
An business development executive travels extensively : An business development executive travels extensively for business. Her company offers two options to offset her driving expenses. Option 1 provides a car allowance of 490 dollars per month and a mileage reimbursement of $0.34/mile for fuel, insuranc..
Determine demand function-inverse demand function for good : The demand for good X is given by QXd = 6,000 - (1/2)PX - PY + 9PZ + (1/10)M Research shows that the prices of related goods are given by Py = $6,500 and Pz = $100, while the average income of individuals consuming this product is M = $70,000. Determ..
What accounts for the stability of a tertiary : What accounts for the stability of a tertiary carbocation, with all methyl substituents?

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd