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Author Question: An investor has to choose between stocks A&B, each selling for 10 . Stock A, can either increase ... (Read 53 times)

jasdeep_brar

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  • Posts: 569
on: Jul 1, 2018
An investor has to choose between stocks A&B, each selling for 10 . Stock A, can either increase in price to 12, with a 50 probability or stay at 10 with a 50 probability. Stock B can either increase in price to 15 with a 50 probability or go down to 7 with a 50 probability. Which of the stocks would the investor choose
 a. Stock A
 b. Stock B
 c. None of the stocks
 d. The investor would exit the market

Question 2

If the bidders at a first-price auction have true values of 8, 7, 6, and 5, the item will sell for
 a. 8
 b. 7
 c. just over 8
 d. just under 7


mohan

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Reply #1 on: Jul 1, 2018
Answer to Question 1

a

Answer to Question 2

a


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