Could someone help me please?!

Consider an investment that pays off $700 or $1,400 per $1,000 invested with equal probability. Suppose you have $1,000 but are

svp [43]

Answer:

a) If you borrow $1,000, the EV is $1,100 and the standard deviation is $990.

b) If you borrow $2,000, the EV is $1,150 and the standard deviation is $1,485.

Explanation:

The expected value is the average return of the investment.

In this case there are only 2 chances: Low ($700 per $1,000) and High ($1,400 per $1,000). Both have 50% chances of happening.

So the expected value is:

$EV = 0.5 * (700) + 0.5*(1400) = 1050.$

The standard deviation can be calculated as

$s=\sqrt{(700-1050)^{2} +(1400-1050)^{2} }=\sqrt{122500+122500} =495$

Case 1: If you borrow $1,000, invest, and then return the $1,000

Low return: 2000*(700/1000)-1000 = 2000*0.7-1000 = 400

High return: 2000*(1400/1000)-1000 = 2000*1.4-1000 = 1800

So the expected value is:

$EV = 0.5 * (400) + 0.5*(1800) = 1100.$

The standard deviation can be calculated as

$s=\sqrt{(400-1100)^{2} +(1800-1100)^{2} } = 990$

Case 1: If you borrow $2,000, invest, and then return the $2,000

Low return: 3000*(700/1000)-2000 = 3000*0.7-2000 = 100

High return: 3000*(1400/1000)-2000 = 3000*1.4-2000 = 2,200

So the expected value is:

$EV = 0.5 * (100) + 0.5*(2200) = 1150.$

The standard deviation can be calculated as

$s=\sqrt{(100-1150)^{2} +(2200-1150)^{2} } = 1,485$

4 0

4 years ago

What factors do you need to consider when producing this good?

jonny [76]

Answer:

Factors of production is an economic term that describes the inputs used in the production of goods or services in order to make an economic profit. These include any resource needed for the creation of a good or service. The factors of production include land, labor, capital and entrepreneurship.

Explanation:

3 0

4 years ago

From 1991 to 2000, the U.S. economy had an annual inflation rate of around 2.76%. The historical annual nominal risk-free rat

azamat

Answer:

2.95% and 2.87%

Explanation:

The computation of the approximate real rate and the estimated real interest rate is shown below:

The Approximate real rate is

= Historic annual nominal risk free rate - Annual inflation rate

= 5.71% - 2.76%

= 2.95%

And, the estimated real interest rate is

= (1 + historical annual nominal risk free rate) ÷ (1 + annual inflation rate) - 1

= (1 + 0.0571) ÷ (1 + 0.0276) - 1

= 2.87%

We simply applied the above formulas so that each one could be determined

3 0

3 years ago

The UJava espresso stand needs two inputs, labor and coffee beans, to produce its only output, espresso. Producing an espresso a

bezimeni [28]

Answer:

Q = min[3B; 40L]

Explanation:

This is an example of Leontief production function in which factors of production, in this case B and L, are used in fixed proportion that is determined by the production technology which makes substitutability between factors impossible.

If we assume that 3 ounces of B and 40 minutes of L are always required to produce one unit of espresso represented by Q, the functional form of the production function can be written as follows:

Q = min[3B; 40L].

8 0

4 years ago

Drew gets married in January of 2019 and provides support for his stepdaughter, Melissa, who is 26 years old. Melissa does not e

OleMash [197]

Answer: A. Melissa qualifies based on her age of 26

Explanation:

An age of maturity qualifies an individual to access some rights in the society, especially at matured age ranging from 18-21 years above. Melissa qualifies to enjoy the benefits of Mr Drew based on her age.

6 0

3 years ago