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FinnZ [79.3K]
3 years ago
7

Suppose Microsoft stock will provide either a return of 10 or 20 percent over the next year and that the probability of the form

er outcome is 0.25 while the probability of the latter is 0.75. If the utility an investor derives from a 10 percent return on Microsoft stock is 200 and the utility the investor derives from a 20 percent return is 400, the investor's expected utility from holding Microsoft stock is _____.
Business
1 answer:
nignag [31]3 years ago
5 0

Answer:

The correct answer is b. 350.

Explanation:

To calculate the expected profit, we use the data from the statement:

10% Yield = 25% Probability

20% Yield = 75% Probability

Profit 10% = 200 * 25%

Profit 20% = 400 * 75%

TOTAL 30% = 50 + 300 = 350

What was done was multiply the percentages of profit vs. the expected return for each group of actions. The sum of both is the total expected by investors as Microsoft profits.

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Recall the text’s definition of diminishing marginal utility: "the common pattern that each marginal unit of a good consumed pro
son4ous [18]

<u>Explanation:</u>

Note, the term diminishing marginal utility refers to an economic principle that states that the more unit of a particular commodity or service we consume, the more the satisfaction (utility) derived out of the consumption reduces or diminishes.

For instance, if I watched movies produced by a particular entertainment company for several days (eg Disney Studios), I may become dissatisfied using this particular entertainment provider and may decide to try another service (Netflix).

Another instance could occur after exercising, I'm given 3 bottles of coke, after taking my first bottle, the amount of utility I derive would reduce until I get to the third bottle, at this point I've reached my peak.

The law of diminishing marginal utility failed for someone I know who had used the same type of toothpaste and brushed her teeth at least once a day for a period of over 10 years.

6 0
3 years ago
Wind damage occurs to your car costing $800 to repair. If you have a $500 deductible for collision and full coverage for compreh
Igoryamba

Answer:

$300

Explanation:

Deductible referred to as the amount paid from one's pocket to join the amount of one's loss, while the insurance company balance up the remaining.

The loss which is $800 is a little bit more than deductibles.

Damage=$800

Deductibles=$500

The damages is just $300 more than deductibles.

As stated in the question there is a collision and comprehensive insurance for the driver , therefore the driver will pay $500 from his own pocket.

THE PORTION OF CLAIM THE INSURANCE COMPANY PAY =($800-$500)=$300

$300 will only be received from the company.

In Higher deductibles the premium insurance is reduced in cost.

In lower deductibles there is higher premium but with the cost from one's pocket is low.

Deductible has influence on

one's claim.

Comprehensive insurance is one of automobile insurance,it covers damages or event that occurs to a car that is out of one's control.It covers for replacement or repairment of one's car if damaged by something or to repair bit, other a collision.

Comprehensive insurance can cover up for

theft ,natural disasters or from fire incident.

5 0
3 years ago
Read 2 more answers
Austere Realty, a real estate company, ensures that its web page always shows up high among the list of results whenever a user
Phantasy [73]

Answer:

The correct answer is the option C: Search engine optimization.

Explanation:

To begin with, the name of "Search Engine Optimization" or SEO refers to the process used by companies that focus on improving the quality and quantity of the website traffic related to a website that comes from search engines. Meaning that this process seeks for the way to get those websites to be find more easily by the consumers depending on how much related they are to what the consumers look for on the engine searchers. That is why that in this case, Austere Realty is actively engaged in search engine optimization due to the fact that they always ensure that its web page shows up high amoing the list of results of the search engine.  

7 0
3 years ago
Ivanhoe provides environmentally friendly lawn services for homeowners. Its operating costs are as follows. Depreciation $1,500
Sonbull [250]

Answer:

Explanation:

To start with, we need to get the value for total fixed cost and total variable cost

Total fixed costs = Depreciation + Advertising + Insurance

= $1,500 + $350 + $2,770

= $4,620

Total variable costs per unit = Weed and feed materials + Direct labor + Lawn Fuel

= $17 + $9 + $2

= $28 per lawn

We also need to compute the contribution margin ratio

= Sales per unit - Variable cost per unit / Sales per unit

= (70 - 28) / 70

= 0.6

= 60%

Therefore;

1. Break even sales

5 0
3 years ago
Except media what else can provide job information<br>​
kifflom [539]

Answer:

see below

Explanation:

Other sources of job information are

<u>1. Trade or professional associations </u>

They are organizations formed by professionals in the same career path. Members frequently meet to share information regarding developments in their profession.

2<u>. Family and friends working in different organizations</u>

Close friends and relatives are an important source of information for vacancies existing in different workplaces.

<u>3. Educational institutions</u>

In some cases, employers share information on their available job opportunities with schools and colleges.

<u>4. Career or employment agencies</u>

Employment agencies have updated information on various labor requirements for different employers

6 0
3 years ago
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