« previous next »

Author Question: A risk-averse investor will decide whether or not to invest by determining if the expected value of ... (Read 96 times)

kfurse

  • Hero Member
  • *****
  • Posts: 590
on: Jul 1, 2018
A risk-averse investor will decide whether or not to invest by determining if the expected value of the investment if positive.
 
  Indicate whether the statement is true or false

Question 2

Kourtney invested 100 in a project that has a 20 chance of being worth 200 and a 75 chance of being worth 80. One can conclude that Michelle is
 
  A) not risk averse.
  B) risk neutral.
  C) risk loving.
  D) extremely poor.
Microeconomics ¦ Perloff ¦ 8th Edition
Buy Test-Bank


babybsemail

  • Sr. Member
  • ****
  • Posts: 304
Reply #1 on: Jul 1, 2018
Answer to Question 1

False. A risk-averse investor will examine the expected utility from investing. If the expected utility from investing is larger than the expected utility from not investing the investment will be made.

Answer to Question 2

A


Related Topics

Need homework help now?

Ask unlimited questions for free

Ask a Question
« previous next »
 

Did you know?

Most strokes are caused when blood clots move to a blood vessel in the brain and block blood flow to that area. Thrombolytic therapy can be used to dissolve the clot quickly. If given within 3 hours of the first stroke symptoms, this therapy can help limit stroke damage and disability.

Did you know?

Once thought to have neurofibromatosis, Joseph Merrick (also known as "the elephant man") is now, in retrospect, thought by clinical experts to have had Proteus syndrome. This endocrine disease causes continued and abnormal growth of the bones, muscles, skin, and so on and can become completely debilitating with severe deformities occurring anywhere on the body.

Did you know?

About 60% of newborn infants in the United States are jaundiced; that is, they look yellow. Kernicterus is a form of brain damage caused by excessive jaundice. When babies begin to be affected by excessive jaundice and begin to have brain damage, they become excessively lethargic.

Did you know?

Human kidneys will clean about 1 million gallons of blood in an average lifetime.

Did you know?

Drugs are in development that may cure asthma and hay fever once and for all. They target leukotrienes, which are known to cause tightening of the air passages in the lungs and increase mucus productions in nasal passages.

Serotonin and Risk-Taking Behavior Serotonin and Risk-Taking Behavior
Who Goes to College? Comparing Social Class and Ability in Determining College Attendance Who Goes to College? Comparing Social Class and Ability in Determining College Attendance
Nursing Interventions According to Stage of Severity for Suicide Risk Nursing Interventions According to Stage of Severity for Suicide Risk
Describe the development of atherosclerosis, including its role in the risk of heart disease Describe the development of atherosclerosis, including its role in the risk of heart disease
Role of Factors of Production in Determining Growth, 1975–2009 Role of Factors of Production in Determining Growth, 1975–2009
Bateson and Punnett’s Observed and Expected Phenotypes in F2 Sweet Peas Bateson and Punnett’s Observed and Expected Phenotypes in F2 Sweet Peas
Video: Plant Defense Mechanisms from Pathogens

For a complete list of videos, visit our video library