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.
typical assumptions
How does an increase in the size of a future payment affect the present value of a future payment
Question: You are required to perform an economic feasibility study for a project involving the setting up of an information system in a company. The table below summarises th
Give a critique of indifference curve
graphic
Reorganisation of Export Councils: India has a large number of exporpromotion councils, commodity boards and other similar agencies, butheir impact on India's foreign trade h
Question 1: (a) Describe the three different ways of calculating national income. (b) Does the National Income figure accurately reflect the living standardof a population?
Government Spending Wagner's Law of economic activities applies to every economy. According to this law, there is both an extensive and intensive increase in government activit
What is the distinguishes a progressive income tax, from a proportional income tax, or a regressive income tax? A proportional income tax takes the similar percentage of a pe
HOW TO REDUCE SMOKING USING INDIFFERENCE S AND BUDGETLINE
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