The relationship between income and total utility (TU) for 2 investors (Alan and Bob) is as follows: Alan Bob Income TU Income TU 5,000 14 5,000 6 10,000 24 10,000 14 15,000 32 15,000 24 20,000 38 20,000 36 25,000 43 25,000 52 30,000 47 30,000 72 35,000 49 35,000 100 Each investor has been confronted with the following three investment opportunities. The first opportunity is an investment which pays €15,000 risk free. Opportunity two offers a 0.4 probability of a €25,000 payment and a 0.6 probability of a payment of €10,000. The final investment will either pay €35,000 with a probability of 0.25 or €5,000 with a probability of 0.75. The expected value of opportunity two is €10,000 €6,000 €16,000 €25,000

The relationship between income and total utility (TU) for 2 investors (Alan and Bob) is as follows: Alan Bob Income TU Income TU 5,000 14 5,000 6 10,000 24 10,000 14 15,000 32 15,000 24 20,000 38 20,000 36 25,000 43 25,000 52 30,000 47 30,000 72 35,000 49 35,000 100 Each investor has been confronted with the following three investment opportunities. The first opportunity is an investment which pays €15,000 risk free. Opportunity two offers a 0.4 probability of a €25,000 payment and a 0.6 probability of a payment of €10,000. The final investment will either pay €35,000 with a probability of 0.25 or €5,000 with a probability of 0.75. The expected value of opportunity two is €10,000 €6,000 €16,000 €25,000

A First Course in Probability (10th Edition)

10th Edition

ISBN:9780134753119

Author:Sheldon Ross

Publisher:Sheldon Ross

Chapter1: Combinatorial Analysis

Section: Chapter Questions

Problem 1.1P: a. How many different 7-place license plates are possible if the first 2 places are for letters and...

See similar textbooks

Similar questions

interpret Company A and Company B's results below in terms of the factors that impact Cost Volume Profit Analysis (CVP). Why does Company B have the greater degree of operating leverage? As a manager, why is operating leverage an important concept? Company A Company B Sales (10,000 units times $26) $260,000 Sales (10,000 units times $32) $320,000 Less Variable expenses (10,000 units $16) 160,000 Less Variable expenses (10,000 units times $20) 200,000 Contribution margin (a) 100,000 Contribution margin (a) 120,000 Less Fixed expenses 80,000 Less Fixed expenses 100,000 Net operating income (b) 20,000 Net operating income (b) 20,000 Degree of operating leverage (a divided by b) 5.0 Degree of operating leverage (a divided by b) 6.0
• Part 1 Rework problem 8 in section 1 of Chapter 7 of your textbook, about the office furniture manufacturer, using the following data. Assume that each filing cabinets requires 55 pounds of steel and 3.5 hours of labor, and that each desk requires 70 pounds of steel and 2.5 hours of labor. Assume also that the manufacturer has available 144 tons of steel and 1400 hours of labor. Assume also that the profit on each desk is $40.00 and the profit on each filing cabinet is $33.00. How many filing cabinets and desks should the manufacturer produce in order maximize its profit? When you formulate a linear programming problem to solve this problem, how many variables, how many constraints (both implicit and explicit), and how many objective functions should you have? Number of variables: 2 Number of constraints: 4 Number of objective functions: 1 • Part 2 • Part 3 Formulate the linear programming problem for this situation. (Enter either the word Maximize or the word Minimize in the first…
rience. Question Three The following data represent the net profits made by a sample of 25 companies that operate in real-state sector. 56 97 78 61 79 93 84 76 58 92 89 96 42 44 85 77 53 88 62 84 62 82 75 95 89 1) Choose the best graphical presentation and justify your answer. 2) Based on your answer in (1), construct the selected graphical presentation and comment on the results. Based on your answer in (2), do you think the sector performance is satisfactory? Justify your answer.
Corporate profits: The following table presents the profit, in a recent year, in billions of dollars, for each of the 15 largest U.S. corporations in terms of revenue. Corporation Profit Corporation Profit Exxon Mobil 41.9 Ford Motor 21 Walmart 16.5 Hewlett-Packard 7.9 Chevron 27.7 AT&T 4.7 ConocoPhillips 13.2 Valero Energy 2.9 General Motors 10 Bank of America Corp. 2.3 General Electric 15 McKesson Berkshire Hathaway 11 Verizon Communications 3.2 Fannie -16.1 Send data to Excel
Question 2 A venture capitalist, willing to invest $1,000,000, has three investments to choose from. The first investment, a software company, has a 15% chance of returning $11,000,000 profit, a 31% chance of returning $2,000,000 profit, and a 54% chance of losing the million dollars. The second company, a hardware company, has a 16% chance of returning $9,000,000 profit, a 26% chance of returning $1,000,000 profit, and a 58% chance of losing the million dollars. The third company, a biotech firm, has a 13% chance of returning $6,000,000 profit, a 32% of no profit or loss, and a 55% chance of losing the million dollars. Order the expected values from smallest to largest. O first, third, second Ofirst, second, third Othird, first, second O third, second, first second, first, third O second, third, first Hint: Hint Video on Expected Value [+]
Corporate profits: The following table presents the profit, in a recent year, in billions of dollars, for each of the 15 largest U.S. corporations in terms of revenue. Corporation Profit Corporation Profit Exxon Mobil 41.9 Ford Motor 21 Walmart 16.5 Hewlett-Packard 7.9 Chevron 27.7 AT&T 4.7 ConocoPhillips 13.2 Valero Energy 2.9 General Motors 10 Bank of America Corp. 2.3 General Electric 15 McKesson Berkshire Hathaway 11 Verizon Communications 3.2 Fannie -16.1 Send data to Excel
An entrepreneur who owns and operates two businesses (A and B) would like to analyze their profitability. They would like your help in the analysis. They give you the annual net profit (in thousands of $) for each business from 2008-2020. Table 1: Annual Net Profits for Businesses A and B Business Year Profit Business Year Profit 2008 -50 2008 -10 2009 57 2009 30 2010 71 2010 27 2011 64 2011 22 2012 60 2012 21 2013 50 2013 20 A 2014 41 2014 24 2015 59 2015 24 2016 71 2016 32 2017 71 2017 36 2018 74 2018 37 019 81 20 40 2020 97 2020 49 a. Suppose you want to graph the distribution of profits. Explain why using only one stem- plot might not be optimal for the analysis. b. Describe the correct stemplot to use. Generate this stemplot. Explain your steps. What can you say about the distribution from this stemplot? c. When are stemplots useful? And why is that? d. Suppose that instead of having 26 observations you have 200 observations. What graph should you generate? e. What other type of…
The following table gives the annual revenue for two different companies (in billions of dollars) for a 10-year period. What is the five-number summary for Company A? Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 D Company A 97 97 60 105 87 100 70 101 109 95 96 84 Company B 45 65 66 70 73 82 93 83 ..... What is the five-number summary for company A? Q, =O Q2 =0 Q3 =D Max = Min = %3D (Type integers or decimals.)