Question
In: Economics
Consider the following five lottery tickets: l1 = ($100, .5; $10, .5); l2 = ($110, .5;...
Consider the following five lottery tickets: l1 = ($100, .5; $10, .5); l2 = ($110, .5; $10, .5);
l3 = ($55, 1); l4 = ($110, .5; $0, .5); l5 = ($100, .7; $10, .3).
(a) If you know that an individual is an expected utility maximizer (who likes money), but you do not know more about this person, what can you say about how this individual ranks the lotteries? (You should conclude that one/some comparison(s) are unclear, but one/some can be deduced.)
(b) Same when you know the individual is risk neutral.
(c) Same when you know the individual is risk averse. Hint: This one has one or more relatively obvious comparisons, and one less so.
(d) Same when the individual has utility function u (z) = zt for t equal to 0.1, 0.5 and 0.9. Just by these comparisons which of these three individuals would you say is intuitively most / least risk averse?
Solutions
Rahul Sunny answered 2 years agoRelated Solutions
Consider the following five lottery tickets: l1 = ($100, .5; $10, .5); l2 = ($110, .5;...
Consider the following five lottery tickets: l1 = ($100, .5;
$10, .5); l2 = ($110, .5; $10, .5); l3 = ($55, 1); l4 = ($110, .5;
$0, .5); l5 = ($100, .7; $10, .3). Refer to the list of lotteries
in the question above. Draw two coordinate diagrams where one could
draw some of those two-outcome lotteries when we consider fixed
probabilities and varying prizes. In one diagram you can draw all
but one of the lotteries, in the other...
Consider the following five lottery tickets: l1 = ($100, .5; $10, .5); l2 = ($110, .5;...
Consider the following five lottery tickets: l1 = ($100, .5;
$10, .5); l2 = ($110, .5; $10, .5); l3 = ($55, 1); l4 = ($110, .5;
$0, .5); l5 = ($100, .7; $10, .3). Refer to the list of lotteries
in the question above. Draw two coordinate diagrams where one could
draw some of those two-outcome lotteries when we consider fixed
probabilities and varying prizes. In one diagram you can draw all
but one of the lotteries, in the other...
There are 27 tickets in the lottery, of which 5 tickets win and 3 give the...
There are 27 tickets in the lottery, of which 5 tickets win and
3 give the right to draw the next ticket. Calculate the probability
of winning by purchasing one lottery ticket.
Derive Lens equation of two convex lenses (L1 and L2) separated by 5 cm in Air....
Derive Lens equation of two convex lenses (L1 and L2) separated
by 5 cm in Air. Write down the System Matrix equation and define
each matrix elements.
8.2: Lottery Winners A lottery ticket buyer purchases 10 tickets a week, always playing the same...
8.2: Lottery Winners A lottery ticket buyer purchases 10 tickets
a week, always playing the same 10 5-digit “lucky” combinations.
Write a program that initializes an array or a vector with these
numbers and then lets the player enter this week’s winning 5-digit
number. The program should perform a linear search through the list
of the player’s numbers and report whether or not one of the
tickets is a winner this week. Here are the numbers: 13579 26791
26792 33445...
Consider the following? alternatives: i.$110 received in one year ii.$230received in five years iii.$310received in 10...
Consider the following? alternatives:
i.$110 received in one year ii.$230received in five years
iii.$310received in 10 years
a. Rank the alternatives from most valuable to
least valuable if the interest rate is 9% per year.
b. What is your ranking if the interest rate is
4% per? year?
c. What is your ranking if the interest rate is
13% per? year?
1. Perform a Desk check for the following pseudocode algorithm L1: Program AddFirst5Numbers; L2: Data Counter...
1. Perform a Desk check for the following pseudocode
algorithm
L1: Program AddFirst5Numbers;
L2: Data Counter as Integer;
L3: Data Sum as Integer;
L4: Counter:= 1;
L5: Loop until Counter = 5
L6: Sum := Sum + Counter;
L7: counter := counter + 1;
L8: Next Loop;
L9: Output “The sum is”, Sum;
L9: End AddFirst5Numbers;
2. Write a pseudocode algorithm to print the
following pattern
2 4 6 8 10
3. Using nested loops, write a pseudocode
algorithm to...
An arch dam has the following characteristics. H= 22.2 m, L1=400m, L2=120 m, Find the thickness...
An arch dam has the following characteristics.
H= 22.2 m, L1=400m, L2=120 m, Find the thickness and projection
on the crown cantilever and volume of the concrete.
Consider: (a) Stock trades for $100; (b) Calls with exercise prices of $90, $100, and $110...
Consider:
(a) Stock trades for $100;
(b) Calls with exercise prices of $90, $100, and $110 trade at
prices of $17.03, $10.38, and $6.50 respectively.
If a person buys a $90 call, writes two $100 calls, and buys a
$110 call, what is the magnitude of her maximum loss? The answer is
2.77, how do you solve?
Type or paste question here
Consider: (a) Stock trades for $100; (b) Calls with exercise prices of $90, $100, and $110...
Consider:
(a) Stock trades for $100;
(b) Calls with exercise prices of $90, $100, and $110 trade at
prices of $17.11, $10.69, and $6.10 respectively.
If a person buys a $90 call, writes two $100 calls, and buys a
$110 call, what is her higher break-even point? The answer is
108.17, how do you solve this?
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