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Author Question: Refer to Figure 3-2. A technological advancement would be represented by a movement from A) A to ... (Read 696 times)

khang

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Refer to Figure 3-2. A technological advancement would be represented by a movement from
 
  A) A to B. B) B to A. C) S1 to S2. D) S2 to S1.

Question 2

Suppose a bet is placed on the outcome of the flip of a coin  if the coin comes up heads, you get 25 and if it turns up tails, you lose 25 . If you accepted this bet, does it imply that you are risk averse, risk neutral, or risk loving?
 
  What will be an ideal response?



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Jordin Calloway

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Answer to Question 1

C

Answer to Question 2

The expected value of this bet is zero. If you accepted this bet, it would imply that you are either risk neutral or a risk-seeker. A risk-neutral person would be indifferent to the bet while a risk-averse person would decline the bet.




khang

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Reply 2 on: Jun 29, 2018
Thanks for the timely response, appreciate it


brbarasa

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Reply 3 on: Yesterday
Gracias!

 

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