Investor A has an initial wealth of $100 and a utility function of the form: U(w) = log(w) where w is her wealth at any time. Investment Z offers her a return of −18% or +20% with equal probability. i. What is her expected utility if she invests nothing in Investment Z? ii. What is her expected utility if she invests entirely in Investment Z? iii. What proportion a of her wealth should she invest in Investment Z to maximize her expected utility? What is her expected utility if she invests this proportion in Investment Z?

Answers

Answer 1

With this initial investment of 100, the investors utility if she invests nothing is 2. If she invests entirely her utility is 2.00432

From the available question, these are the the solutions from option (i) to (iii)

i.) We have utility defined as

U(w) = log w

w = 100

[tex]Utility=log(100)[/tex]

= 2

ii) If she invests entirely in Z, utility:

[tex]return*probability\\[/tex]

-18% x 50% =  -9%

20% x 50% = 10%

-9% + 10% = 1%

w = 100 + 1

= 101

[tex]Utility = log(101)[/tex]

= 2.00432

This is her utility if she invests entirely in Z.

iii) This investor has these two choices:

invest in zleave resources idle

If she invests in z she gets a 1% increase. Therefore her wealth increases or is maximum when she invests in Z.

Her utility if she invests this proportion in Z is the same as what was solved in (ii) above.

Read more on https://brainly.com/question/4203540?referrer=searchResults


Related Questions

Which of the following types of business ownership has the highest personal liability risk?
A.
A partnership
B.
A sole proprietorship
C.
A C corporation
D.
An LLC

Answers

Answer:

A C corporation

Explanation:

Answer:

A.partnership

I have picked out A because in a partnership business,one is responsible for the progress of the business and when the business is in debts,he can even sell his personal property to cover up the loss made

Explain 3 factors that change supply elasticity.

Answers

Answer:

There are numerous factors that impact the price elasticity of supply including the number of producers, spare capacity, ease of switching, ease of storage, length of production period, time period of training, factor mobility, and how costs react.

The second issue you chose to address with Kenisha is the complexity of the product. The marketing department conducted numerous focus groups to gauge their reaction to the prototype, and the feedback from these focus groups revealed that customers perceived the product to be too complicated and not sufficiently user-friendly. Which of the following statements would be the best explanation for the rejection based on the focus groups' feedback that the product was too complex?

a. The good news is that you've put a lot of great features in the Radio-DRM. The bad news is that focus group customers thought that it was about as complicated as programming the Starship Enterprise. They don't want to spend hours adjusting dials and knobs; all they want to do is plug it in and set a few controls.
b. The customers in the focus groups thought this product is just too complicated! You're building a cruise ship when a simple rowboat will do. You and your team need to stop over- engineering.
c. The marketing department conducted several focus groups for this prototype, and it looks like there are some problems with its complexity. You need to fix these problems as soon as possible.
d. As you know, the marketing department conducted several focus groups for the prototype. Although there were features customers liked, much of the feedback from customers was that the Radio-DRM needs to be made simpler and more user-friendly.

Answers

Answer:

ushdusbs

Explanation:

espero te si ha bro zorry

Check out this app! It’s millions of students helping each other get through their schoolwork. https://brainly.app.link/qpzV02MawO​

Answers

Answer:

yeah there are more of us

Which QuickBooks Online report answers the common business question: "Who owes me money?"

Answers

Answer:

Accounts Receivable Aging report.

Explanation:

Because you're receiving money.

A local government began the year with a portfolio of securities with an historical cost of $1,200 and a fair value of $1,240. During the year the government acquired an additional security at a cost of $260 and sold for $200 a security that had an historical cost of $172 and a fair value at the beginning of the year of $190. At the end of the year, the securities portfolio had a fair value of $1,330. The amount that should be recognized on the financial statements for the year as investment income is:________

Answers

the answer is 0 because if he did that and then did this that means he finished and got 0

Hugh has experience as a firefighter and a degree in chemistry. What company might be interested in hiring Hugh

Answers

Considering Hugh's experience as a firefighter and a degree in chemistry, the company that might be interested in hiring Hugh is "Fire Protection System Suppliers."

This is because Fire Protection System Suppliers are the companies that provide, manufacture or sell fire fighting products and equipment.

With his knowledge of chemistry, Hugh would understand and know the right chemical and equipment to use in fighting fire faster.

Some of the Fire Protection System Suppliers in the United States include the following:

Koetter Fire Protection, Amerex Corp., Telgia, USA Fire Protection, etc.

Hence, in this case, it is concluded that the correct answer is Fire Protection System Suppliers.

Learn more here: https://brainly.com/question/14657395

Answer: A State Agency Looking For A Fire Inspector

Explanation: i just took a quiz and that was the right answer

Consider that your income has decreased this year from $50,000 to $10,000. You bought 2 quantities of product B last year and decide to purchase 9 quantities of product B this year. Keeping all other factors the same, which statement is correct regarding your income elasticity of demand and product B?

Answers

The statement that is correct regarding the income elasticity of demand and product B is E. The income elasticity of demand is -0.95 and the designer jeans are considered inferior goods.

From the complete question, the elasticity of demand will be calculated thus:

= (9 - 2)(50000 + 10000) / (2 + 9)(10000 - 50000)

= -420/440

= -0.95

Therefore, the income elasticity of demand is -0.95 and the designer jeans are considered inferior goods since it has a negative income elasticity of demand.

Read related link on:

https://brainly.com/question/25301482

Nicole and Larry have decided to perform the landscaping of their new home by themselves. They also plan to take a do-it-yourself class at a local home store so they can replace the tile in the master bathroom without using a contractor. The effect of performing these tasks themselves will result in an increase in their:

Answers

The effect of performing these tasks themselves will result in an increase in their sweat equity.

Sweat equity is simply known as the interest gotten by the owner or increase in worth that is brought about by direct input of hard work by the owner(s).

It is the one method that is mostly adopted in building equity for low-cash entrepreneurs in their start-up ventures due to the fact that they lack the capability to aid much financial capital to their business.

Conclusively, This sweat equity helps individuals or companies to get funds without having more debts while for the workers, it is a case of high risk to get high reward.

Learn more from

https://brainly.com/question/7305328

1. The text (page. 220-221) tells the story of Mr. Jones who sues Mr. Smith for taking his briefcase even though he loses a significant amount of money. It also tells the story of why Mr. Jones will make Mr. Smith an offer above the rational choice prediction if they are considering a joint venture where both must participate or the venture fails. Explain what is causing these deviations from rational choice theory and why some knowledge of the person you are dealing with is important. (20 points)

Answers

These deviations are likely to be caused by emotions and it is important to have information about the person you are dealing with to favor your interests and make the best decision.

The Rational Choice Theory states:

A person will always make decisions to favor himself or herselfDecisions are based on rational calculations

Despite this, individuals might make irrational decisions if:

Emotions External factors

In the case of Mr. Jones, he makes an irrational decision because by suing Mr. Smith he loses more money. This is likely motivated by emotions such as a desire for justice or a desire to revenge.

Moreover, in this situation, it is shown Mr. Jones does not have enough information about the person he is dealing with (Mr. Smith) and this lack of knowledge does not allow him to make the best decision possible.

Learn more in: https://brainly.com/question/18101591

2. There is no way to resolve the conflict between commercial business goals and those of social innovation. True or False?
a. True
b. False

Answers

There is no way to resolve the conflict between commercial business goals and those of social innovation. Social innovation follows a different process to more commercial forms of innovation. Whilst empathy and a need for social justice may be necessary attributes of a social entrepreneur, they are not sufficient. so true.

HOW TO EASILY BUY A PASSPORT ONLINE.
Buy US Passport, Buy EU Passport, Buy Canadian Passport, Buy Australian Passport.
For more information, visit https://www.passportexpeditenetwork.com/

Answers

no dont do this plsssss

Question 3 of 10
form from their clients that
Independent contractors receive a
verifies their earnings for the year.
O A. W-2
B. 1099
O C. 1040
D. W-4

Answers

Answer:

B. 1099

Explanation:

Answer:B

Explanation: I just got it right

At the​ profit-maximizing output​ rate, what is the average total​ cost?

Answers

a. what is the monopolist's profit- maximizing output? 5000 units. The point of intersection of MR and MC or when MR= MC. And when the line is extended on to the demand curve it gives the profit maximizing out put for a monopolist

Jamie is considering leaving her current job, which pays $75,000 per year, to start a new company that develops applications for smartphones. Based on market research, she can sell about 50,000 units during the first year at a price of $4 per unit. With annual overhead costs and operating expenses amounting to $145,000. Jamie expects a profit margin of 20 percent. This margin is 5 percent larger than that of her largest competitor, Apps, Inc.

Suppose that Jamie’s estimated selling price is lower than originally projected during the first year. How much revenue would she need in order to earn:

Positive accounting profits?

Positive economic profits

Answers

Answer:

Accounting costs = $145,000 (annual overhead costs and operating expenses)

Implicit cost = $75,000 (Value of Salary Given Up)

Opportunity cost = $220,000 (Accounting Costs + Implicit Costs)

Revenue needed to earn positive accounting profits = at least $145,000 (more than accounting costs)

Revenue needed to earn positive economic profits = at least $220,000 (more than opportunity cost)Explanation:

Which of the following represents a parallel multi-instance task?

Many customers watching one movie.
One employee taking an order while another collects payment in a drive-through.
Two baristas working at a Starbucks counter.
One employee taking pizza orders.

Answers

Answer:

One employee taking an order while another collects payment in a drive-through

One employee taking an order while another collecting payment in a drive-through represents a parallel multi-instance task.

The answer is option B.

What is a parallel multi-instance task?

Multi-instance activities are denoted via three parallel strains at the lowest center of the hobby/task image. Its cause is to expose that the activity occurs for a set of items or items.

The variety of instances that the hobby completes is defined with the aid of the number of objects that exist within the collection.

Learn more about Multi-instance activities here: https://brainly.com/question/13800096

#SPJ2

construct a quadriteral PQRS, given that QR=4.5cm PS=5.5cm,RScm5cm and diagonalPR=5.5cmand diagonal SQ=7cm​

Answers

Answer:

The quadrilateral is drawn above

The following transactions took place for Smart Solutions Incorporated. 2020

a. July 1 Loaned $63,000 to employees of the company and received back one-year, 10 percent notes.
b. December 31 Accrued interest on the notes. 2021
c. July 1 Received interest on the notes. (No interest has been recorded since December 31.)
d. July 1 Received principal on the notes.

Required:
Prepare the journal entries that Smart Solutions Inc. would record for the above transactions.

Answers

Here, we going to prepare the journal entries for the various transactions of Smart Solutions Inc.

Date              Account titles and Explanation      Debit     Credit

Jul-01 2020  Notes receivable                             $63000

                          Cash                                                            $63000

Dec-31 2020  Interest Receivable                        $3,150

                           Interest Revenue                                        $3,150

Jul-01 2021     Cash                                                 $6,300

                            Interest Revenue                                       $3,150

                            Interest receivable                                     $3,150

Jul-01 2021     Cash                                                 $63000

                             Notes receivable                                        $63000

Notes:

Interest for 6 months on July 1 = $63000 * 10% * (6/12)

Interest for 6 months on July 1 = $3,150

Interest for 1 year = $63000 x 10%

Interest for 1 year = $6,300

See similar solution here

brainly.com/question/22716725

Education Planning: Suppose you have just had your first child and you want to begin saving for their college education. You estimate that with inflation, the cost of four years of college at a top university will cost a total of $225,000 in 18 years when your child graduates from high school. How much do you need to invest at the end of each month (part a) or year (part b) for the next 18 years to accumulate the $225,000 assuming:

Answers

To obtain $225,000 in 18 years it is necessary to save or invest at least  1,041.66 every month and 12,500 every year.

We know the total money that needs to be saved to cover college education is $225,000 and the time to save up this money is 18 years. Based on these two details, let's find out how much you need to save every month and every year.

Total of months:

12 months x 18 years = 216 months.

The total you need to save per month:

$225,000 / 216 = 1,041.66.

The total you need to save per year:

1,041.66 x 12 = 12,499.99 that can be rounded as 12,500.

Note: This question seems to be incomplete; however, I answered it based on the information provided.

Learn more in: https://brainly.com/question/11508361

How would you balance demands from different stake holders that are at
variance with each other?

Answers

Be sure that stakeholder requirements can be met in the objectives. ...
Prioritize requirements. ...
Resolve conflicts between stakeholder requirements. ...
Let the customer requirements take precedence. ...
Ask for Management Support.

As an Austrian–Thai company, Red Bull has done a remarkable job of positioning itself internationally by coming across as a local company in every country where Red Bull is sold. Would you be more or less likely to buy Red Bull knowing the brand is Austrian but with a strong Thai influence? Does it generally matter to consumers where a product originates from?

Answers

The origination of a product doesn't really matter when the company's brand plays an important role in the improvement of sales.

A brand refers to the business concept or the marketing concept that's used by people to identify a product. A brand is important as it makes one unique from other companies.

The fact that the brand of Red Bull is Austrian but has a strong Thai influence can't have a negative effect on the sales or the revenue of the company since the brand is well-known and has an international customer base.

Read related link on:

https://brainly.com/question/25248688

This interview type is used to determine which applicants have the nu
next level of interviews.
a. Group interview
b. Performance interview
C. Stress interview
d. Screening interview
0 0
Please select the best answer from the choices provided
O A

Answers

D. screening interview

hope it helps

Quá trình sản xuất mà ở đó người ta sản xuất và xử lý một khối lượng lớn một loại sản phẩm hoặc một nhóm sản phẩm nào đó. Thiết bị được lắp đặt theo dây chuyền sản xuất làm cho dòng di chuyển của sản phẩm có tính chất thẳng dòng.

Answers

Answer:

uhhh....... ........ English

Answer:

English please?

Explanation:

i dont understand ur language-

What is millennial behaviour regarding cooking and food trends?

Answers

In considering healthy eating, their report also indicates that millennials have primary importance in transparency around ingredients with 36% wanting to know if products are Australian-owned and grown, followed by whether they are locally grown (31%) and whether products have no additives or preservatives (24%).

Acellus: into to accounting ?

Answers

sorry I don't know this question can you explain it

HELPPP Why do many business owners avoid market research? Question 14 options: They're afraid of hearing any negative feedback. They don't know how to do it. They're unwilling to take the time. They're shy.

Answers

Answer:

they are afraid of hearing any negative feedback

What is the economics

Answers



Economics is the social science that studies the production, distribution, and consumption of goods and services. Economics focuses on the behaviour and interactions of economic agents and how economies work.

Gay and Joy developed a neat Bento box for children. The shape of the containers encourages healthy eating, and it is very popular. They have been paying another company to manufacture the boxes for them but are interested in manufacturing the boxes themselves. They’ve developed the following cost estimates:
Sales (100,000 units) $ 1,000,000
Costs: Fixed Variable
Raw Materials $ 0 $ 300,000
Direct Labor 0 200,000
Factory Costs 100,000 150,000
Selling and Administrative
Costs 110,000 50,000
Total Costs $ 210,000 $ 700,000
Operating Income $ 90,000
1. How many units will Gay and Joy need to sell to breakeven?

Answers

If Gay and Joy developed a neat Bento box for children. The shape of the containers encourages healthy eating, and it is very popular. How many units will Gay and Joy need to sell to breakeven is: 70,000 units.

First step is to determine the selling price

Selling price = $1,000,000 / 100,000 units

Selling price = $10

Second step is to determine the Variable cost per unit  

Variable cost per unit =$700,000 / 100,000 units

Variable cost per unit = $7

Third step is to calculate the Contribution margin per unit using this formula

Contribution margin per unit = Selling price - Variable cost

Let plug in the formula

Contribution margin per unit = $10 - $7

Contribution margin per unit = $3

Fourth step how many units will Gay and Joy need to sell to breakeven

Using this formula

Break even= Fixed cost / Contribution per unit

Break even = $ 210,000 / $3

Break even  =70,000 units

Inconclusion if Gay and Joy developed a neat Bento box for children. The shape of the containers encourages healthy eating, and it is very popular. How many units will Gay and Joy need to sell to breakeven is: 70,000 units.

Learn more here:

https://brainly.com/question/16674064

Lynx Inc. sells apparel merchandise to Dyson Inc. at a gross sales price of $980, credit terms 2/10, n/30 on July 10, 2020. Dyson pays for the merchandise in full on July 19, 2020.

Required:
Record the entries required on July 10, 2020, and July 19, 2020, for Lynx Inc. Assuming use of the gross method in accounting for credit sales. Omit the cost of goods sold entry.

Answers

Answer:

Explanation:

July 10

Dr. Accounts Receivable (98% of sales because of 2% discount)   960

Cr. Sales Revenue  960

July 19  

Dr. Cash   960

Cr. Accounts Receivable    960

 

Which of the following best defines the Theory of Constraints? a. The concept of purposely creating barriers in a process in order to evaluate the impact on the workflow b. Maximizing cash flow by minimizing throughput c. A set of principles that focuses on increasing total process throughput by maximizing the utilization of all bottleneck work activities d. Limiting demand in order to better service remaining customers

Answers

In business, the Theory of Constraints is a methodology or set of principles to improve possible constraints or bottlenecks and maximize results (Option B).

In companies, it is common goals or projects are limited by factors such as:

Time.Communication problems.Limited resources.Leadership issues.Among others.

These limitations are known as constraints or bottlenecks. Moreover, the Theory of Constraints proposes these factors can help companies achieve a goal or maximize results if the company focuses on improving these limiting aspects.

This means this theory states the process and results can be increased if the bottleneck activities are also maximized (option B).

Learn more in: https://brainly.com/question/20040228

Other Questions
Is zero pollution possible under a marketable permits system Under the UCC Article 2, if a buyer breaches a sale of goods contract, the seller gets specific remedies.(List 2 of these) What does Mrs. Putnam mean when she says, "There are wheels within wheels... and fires within fires"? Which foods naturally contain small amounts of fluoride? a. Vegetables b. Cereals c. Citrus fruits d. All of the above a physics student throws a stone horizontally off a cliff. one second later, he throws a second identical stone in exactly the same way. which of the following statements is true? When a whole species dies all at once it is called a mass extinction. True/False Please help! I will give 100 pts and brainliest if it is good. Read the excerpt from H. G. Wells's The War of the Worlds 2.But, looking, I presently saw something stirring within the shadow: greyish billowy movements,one above another, and then two luminous disks-like eyes. Then something resembling a littlegrey snake, about the thickness of a walking stick, coiled up out of the writhing middle, andwriggled in the air towards me-and then another.How does the author create an aesthetic impact in the excerpt?O through scientific explanationO through colorful descriptiono through realistic dialogueO through a comforting tone What are Advancing Colors Which of the following is a way that minerals are used?a industryb. constructionc. technologyd. all of the abovePlease select the best answer from the choices provided OBOD which statement best explains the orientation of the phospholipid molecules in this model? the leader who brought christianity to the franks was Match each cause with an effect to learn a few tragic consequences of slavery. Put the letter of the effect next to the corresponding cause given the graphs of f and g below, find the following. give the exact if defined. Where did the tobacco industry develop in North Carolina?within the states mountain regionalong the coast and in the Outer Banks areain several towns along the Virginia borderaround the cities of Winston-Salem and Durham whats the numerator for the following rational expression 8/y+3/y=?/y Veggies Market sells 5 avocados for $2.30 and 3 tomatoes for $2.97. Martina buys 2 avocados and 1 tomato. What is the total cost of her veggies? During the early years of World War I, which of the following did the Germans use to great advantage?the field telephonethe machine gunthe submarinethe tank WHAT IS THE NATIONAL ANTHEM OF INDIA Fill in the blank statement to make it true. -3 x _ =12