Venture Limited is a company with net sales of $30 million. The company currently must decide whether to enter one of two risky ventures or invest in a sure thing. The gain from the latter is a sure $125000. The possible outcomes for the less risky venture are a $0.5 million loss a $0.1 million gain and a $1 million gain. The probabilities of these outcomes are 0.25 0.50 and 0.25 respectively. The possible outcomes of the more risky venture are a $1 million loss a $1 million gain and a $3 million gain. The probabilities of these outcomes are 0.35 0.60 and 0.05 respectively. If Venture Limited must decide on exactly one of these alternatives what should it do?
Objective: To see how the company s risk averseness determined by its risk tolerance in an exponential utility function affects its decision. Create a line chart that includes three series that is three lines (or curves). Each line should show the expected utility of a particular decision for a sequence of possible risk tolerance values. This chart should make it clear when the more risky option becomes optimal and whether the less risky option is ever optimal.
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BENCHMARK – EFFECTS OF CHILDHOOD TRAUMA WORKSHEET
Academic Level University Subject Healthcare Type of Paper Other (Not listed) Paper Format APA Assessment Traits Benchmark Requires Lopeswrite Assessment Description Complete the “Effects of Childhood Trauma Worksheet” document attached. While APA format is not Read more…