Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Risk Aversion and Income
- Variability in potential payoffs increases risk premium.
- Example:
* The expected income is $20,000, but expected utility falls to 10.
Expected utility = .5u($) + .5u($40,000)
= 0 + .5(20) = 10
* The certain income of $20,000 has a utility of 16.
* If person is required to take the new position, the utility of them will fall by 6.
* The risk premium is $10,000 (that is they would be willing to give up $10,000 of the $20,000 and have same E(u) as the risky job.
* Thus, it can be said that greater the variability, greater the risk premium.
* Indifference Curve
- Combinations of the3 expected income & standard deviation of income which yield the same utility.
Which firm has the greatest minimum efficient scale?
Regardless of the market structure, oligopolist and the monopolist maximize their TR when MR=0. Do you agree?
Is it true to say that inflation can only sustain with the increase in money supply? Inflation can only be sustained if there is a persistent enhance in money supply. If there
williamson''s model of managirial discretion
Explain three major barriers to development experienced by developing countries. Well, the scope of possible answers here is, em, wide, to say the least. The issue is not to si
Establish relationship between production and cost for a firm operation in perfect competition market in case of i phone
What is the difference between GDP and GNP? Gross domestic product (GDP) is the value of the total final output formed inside a country, during a given year. GDP, like all mea
conditions of pareto optimality
Transport Infrastructure: The development of transport infrastructure plays an important role in the growth process through increasing mobility of resources and increasing fac
Public Administration: According to L.D. White, "Public administration consists of all those operations having for their purpose the fulfillment or enforcement of public polic
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!
whatsapp: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd