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
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<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.
Research could be on things like medical studies, semester tests, policial topics for news articles, or making a diagram or chart because you have use only key information.
Answer:
(B) Mark has a $3,000 capital loss deduction.
Explanation:
Based on the tax bracket proposed, we deteminate the 7,000 is a short-term gain
and the second a long term gain.
First we must offset short capital losses against short capital gains:
7,000 - 18,000 = 11,000 short-term loss
now we offset against long term, if it is gain it will be long term gain if loss short term loss:
6,000 - 11,000 = 5,000 short-term loss
Okay we end up with a total loss of 5,000 but; <u>we have a cap at 3,000 </u> . So that is all Mark can claim as a deduction in other categories against wages and salaries or to carry foward over next period
Answer:
Cost of Quality Report
Quality Cost Quality Cost Percent of Total Percent of
Classification Quality Cost Total Sales
Prevention $23,400 10.0% 1.3%
Appraisal $46,800 20.0% 2.6%
Internal failure $70,200 30.0% 3.9%
External failure $93,600 40.0% 5.2%
Total $234,000 100.0% 13.0%
percent of total sale = quality cost/$1,800,000
