User Account

All Pages

Zero point hedge fund

Assignment Help History
Reference no: EM133305128

Zero Point Hedge Fund has $250 in wealth and is considering an investment project that requires an upfront $150 investment. With the project, Zero must choose either safe or risky. If Zero picks safe, the project generates revenue $160 with prob. 0.95 and revenue $75 otherwise. If Zero picks risky, the project generates $190 with prob. 0.77 and $0 otherwise. Any wealth that Zero doesn't allocate to the project earns a risk free 0%.

1. If Zero uses its own wealth to fund the project, what is the expected payoff from choosing safe, and the exp. payoff from risky?

2. If Zero finances the entire investment using a 0% loan, and is liable for repayment only from project cash flow (limited liability), what are the exp. payoffs from safe and risky?

3. Now the lender obligates Zero to fund part of the project using its own capital. What is the minimum capital amount necessary (along with a 0% loan to cover the rest) in order to ensure that Zero prefers the safe choice over the risk choice?

Reference no: EM133305128

Questions Cloud

What is meant by corporate governance : Explain what is meant by corporate governance. Explain what is meant by the Term Structure of Interest Rates.
What are consequences of self-fulfilling prophecies : What are two potential negative consequences of self-fulfilling prophecies? Name two potential positive consequences.
What was the control variable in the study : What was the control variable in the study and How can control and experimental groups be defined
Plan for choosing an authorative style : plan for choosing an authorative style when working with children is to set goal for children and challenge every child based on their need in their development
Zero point hedge fund : Zero Point Hedge Fund has $250 in wealth and is considering an investment project that requires an upfront $150 investment.
Important for criminal justice professionals to study ethics : According to Pollock (the author of your text), it is especially important for criminal justice professionals to study ethics. Discuss at least two of the point
What are the worst symptoms to deal with disease : What are the worst symptoms or hardest to deal with symptoms of the disease? Are you experiencing any side effects from the treatments or medications?
What are pros and cons of setting up a centralized office : The intent is to explore whether to create centralized intake system in several neighborhoods, involving these organizations to serve multi-need families.
How individuals are presented in all of advertisements : Describe how individuals are presented in all of your advertisements and In this step, do not make interpretations or judgments about the individuals behaviors

Reviews

Write a Review

History Questions & Answers

  History of imperialism and colonialism

Discuss the specific connections between economic development and imperialism in the latter half of the 20th century.

  Explain immigration to america

Explain immigration to America during the half of 19 th century

  American society in the making

American Society in the Making

  Conditions of late 19th century worker

Some historians considered the industrialists of the late 19th Century to be captains of industry while others considered them robber barons. Which view do you believe to be correct and why.

  Explaining the transition of humankind

Explain the significance of the transition of humankind from a hunter-gatherer society to a food-producing society. Include the following: A description of the Paleolithic era

  Tombs and monuments

Tombs and Monuments: Compare an aspect of the tomb of Emperor Shihuangdi with the burial tombs of other cultures, such as Egypt or Mesopotamia. Explain whether you think the emperor's elaborate tomb was motivated by power or religious beliefs.

  Accomplishments of egyptian female

Can anyone educate me regarding one distinct Mesopatamian and one Egyptian female and their accomplishments?

  Describing the characteristics of mesopotamia

What are the characteristics of the first civilizations of 5000 years ago? Especially in Mesopotamia.

  Explaining the vulnerability of mesopotamia

Determine why Mesopotamia was so vulnerable.

  Difference between egypt and mesopotamia

Some have said that the strength and endurance of the Empire and the regular, dependable recurrence of the Nile flood gave the artists-craftsmen a sense of consistency that profoundly influenced the nature of their artistic creations.

  Characteristics of first civilizations

What are the characteristics of the first civilizations of 5000 years ago( especially in the Mesopotamia)? what makes these groups "civilized" as opposed to prehistoric peoples?

  Growth and change in society

Cultures of Mesopotamia, especially Summer, and Egypt. How cultures change over time.

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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