Should you make the investment

Assignment Help Econometrics

Reference no: EM131250855

Suppose you are a risk-averse decision maker with a utility function given by

where I denotes your monetary payoff from an investment in thousands. You are considering an investment that will give you a payoff of $10,000 (thus, I = 10) with probability 0.6 and a payoff of $5,000 (I = 5) with probability 0.4. It will cost you $8,000 to make the investment. Should you make the investment? Why or why not?

Reference no: EM131250855

Questions Cloud

Percent of the students are female : At a college, 55 percent of the students are female and 30 percent of the students receive a grade of C. About 35 percent of the students are female and not C students. Use this contingency table.

Determine the diversity factor and annual load factor : If the maximum demand on the station is 2500 kW and the number of kWh generated per year is 45 x 105, determine the diversity factor and annual load factor.

Describe various causes of cancer : For this Assignment, you will review 5 case studies on various types of cancers. You will create a PowerPoint presentation giving a synopsis of each cancer identified. Your presentation should have a total of 10-15 slides

How do you define the concept of attention : How do you define the concept of attention? Can attention be consciously allocated to tasks? Why or why not? What is the relationship between attention and cognition?

Should you make the investment : You are considering an investment that will give you a payoff of $10,000 (thus, I = 10) with probability 0.6 and a payoff of $5,000 (I = 5) with probability 0.4. It will cost you $8,000 to make the investment. Should you make the investment? Why o..

Evaluating the org value chain : Evaluating the strengths and weaknesses of functional elements of health care org is as effective as evaluating the org's value chain?

Explain ethnicity influences courtroom proceedings : Explain whether ethnicity influences courtroom proceedings and judicial practices. Summarize the arguments for and against ethnicity-based jury nullification.

Define three expectations for appropriate classroom behavior : Identify and describe three expectations for appropriate classroom behavior for young children with examples for each. Critically analyze Ron's challenging behaviors to determine contributing factors (as presented in Level A Case 1).

Determine the most economical cross section : Determine the most economical cross-section for a 3-phase transmission line, 1 km long to supply at a constant voltage of 110 kV for the given daily load cycle :

User Account

All Pages