1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
grigory [225]
2 years ago
8

Which investment would you select if you were risk neutral?

Business
1 answer:
nadezda [96]2 years ago
8 0

Here, the investor is risk-neutral.

A=0

Thus, U = E(r).

We have the requisite information to answer the question, hence option E is eliminated.

Investment Mean Return Std Dev U

1 0.12           0.3                   0.12

2 0.15      0.5                  0.15

3 0.21        0.16                0.21

4 0.24 0.21               0.24

Thus, it can be seen that investment 4 given the maximum utility, and is thus the selected investment for a risk neutral investor. Thus, option D.

What options does a risk-averse individual select?

  • When someone is considering different investment options, they are said to have a risk-neutral mentality.
  • One is considered to be risk neutral if they just consider possible profits, regardless of the danger.
  • To assess profit without considering risk may look like a dangerous behavior by nature.

Learn more about risk-neutral person

brainly.com/question/16844035

#SPJ4

<u>The complete question is - </u>

Use the below information to answer the following question Investment WN - Expected Return E() 0.12 0.15 0.21 0.24 Standard Deviation 0.3 0.5 0.16 0.21 U= E(r)-(A/2)s2 Which investment would you select if you were risk neutral? A. 1 B.2 C. 3 D. 4 E. Cannot be determined from the information given. If you are risk neutral, your only concern is with return, not risk.

You might be interested in
Deon is opening a car wash, and he has approached SCORE, a SBA organization that assists small-business owners in setting up the
aivan3 [116]

Answer: Write a business plan

Explanation: He would be advised to write a business plan because it is a very important strategic tool for entrepreneurs. A good business plan helps entrepreneurs to focus on the specific steps necessary for them to make business ideas succeed. It also aids them to achieve both their short-term and long-term goals.

6 0
3 years ago
Why the feedback form is so important for the trainer and the training itself?​
SashulF [63]

Answer:

It tells on how he or she can improve his ways of training based on the previous people he or she trained feedbacks.

5 0
3 years ago
Read 2 more answers
Use information from the Washington Post article "Why We've Been Hugely Underestimating the Overfishing of the Oceans" to determ
antiseptic1488 [7]

Answer:

"Why We've Been Hugely Underestimating the Overfishing of the Oceans"

Determining whether each statement is true or false:

a. False

b. True

c. False

d. True

Explanation:

The article "Why We've Been Hugely Underestimating the Overfishing of the Oceans," was published by the Washington Post on January 19, 2016.  It was written by Chelsea Harvey.  It tried to show how the world fish stock had been declining due to overfishing.  This is why it provided a report contrary to the FAO report.  

While the FAO report noted that the peak of worldwide catches was at 86 million tons in 1996, the contrary and independent report, using "catch reconstruction" showed that the peak was at 130 million tons in 1996.  The reconstructed research also showed that worldwide fish catches had suffered declines ever since the 1996 peak, thereby threatening "world food security and marine ecosystems".  The contrary report also suggested that all stakeholders must collaborate so that fish stocks can rebuild naturally.

3 0
3 years ago
To find the annual rate of return on any given stock, add the stock's dividend for the year plus the change in the stock's price
katrin2010 [14]

Answer:

The statement is: True.

Explanation:

The Annual Rate of Return or Yearly Rate of Return is the amount earned over an investment within one year. It is typically represented as a percentage and takes into consideration capital appreciation and the payment of dividends. The formula to calculate the annual rate of return is the following:

Annual Rate of Return = (EYP - BYP)/BYP X 100%

Where:

EYP = End of year price

BYP = Beginning of year price

8 0
3 years ago
Assume the following information:
omeli [17]

Answer:

Total product cost= $181,000

Explanation:

<u>The product cost is the sum of the direct material, direct labor, and manufacturing overhead:</u>

Direct materials $ 70,000

Direct labor $ 37,000

Variable manufacturing overhead $ 12,000

Fixed manufacturing overhead $ 25,000

Total manufacturing overhead $ 37,000

Total product cost= $181,000

7 0
3 years ago
Other questions:
  • A(n) ________ refers to the first public offering of a corporation's stock.
    11·1 answer
  • Explain how and why governments may want to regulate the price setting of a natural monopoly.
    6·1 answer
  • One implication of the bird-in-the-hand theory of dividends is that a given reduction in dividend yield must be offset by a more
    6·1 answer
  • What is the relationship between saving and investing??
    12·1 answer
  • Because chains are so important in the lodging sector, there's little room for smaller companies like bed-and-breakfasts. true f
    5·1 answer
  • Week 1: Roles and Responsibilities in the Procurement Cycle
    5·1 answer
  • a. Jamie purchases a washer and dryer from McKinney Appliances. She applies for the instore credit card. The application contain
    9·2 answers
  • Carrie billed her legal clients $6,000 for legal work completed during the month. This
    12·1 answer
  • When consumers believe that various items provide the same set of attributes, brand _________ results.
    12·1 answer
  • Which element of the business model addresses what a firm provides that other firms do not and cannot?
    14·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!