An investor considers investing ,000 in the stock market. He believes that the probability is 0.30 that the economy will improve, 0.40 that it will stay the same, and 0.30 that it will deteriorate. Further, if the economy improves, he expects his investment to grow to $15,000, but it can also go down to $8,000 if the economy deteriorates. If the economy stays the same, his investment will stay at $10,000.
a. What is the expected value of his investment?
b. Should he invest the $10,000 in the stock market if he is risk neutral?
c. Is the decision clear-cut if he is risk averse? Explain.
At a local elementary school, a principal is making random class assignments for her 8 teachers. Each teacher must be assigned to exactly one job. In how many ways can the assignments be made?
Apparently, depression significantly increases the risk of developing dementia later in life (BBC News, July 6, 2010). In a study, it was reported that 22% of those who had depression went on to develop dementia, compared to only 17% of those who did not have depression. Suppose 10% of all people suffer from depression.
a. What is the probability of a person developing dementia?
b. If a person has developed dementia, what is the probability that the person suffered from depression earlier in life?
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more