# Question

By next year, a stock you own has a 25% chance of being worth $ 400 and a 75% probability of being worth $ 200. What are the expected value and the variance? 1.5.

## Answer to relevant Questions

What is the difference—if any—between an individual gambling at a casino and gambling by buying a stock? What is the difference for society?Maoyong’s utility function with respect to wealth is U(W) = ln W (where “ ln W” means the natural logarithm of W). Plot his utility function and use your figure to determine whether Maoyong is risk averse. Consider a household that possesses $ 160,000 worth of valuables such as jewelry. This household faces a 0.2 probability of burglary, in which case it loses $ 70,000 worth of the valuables. Suppose it can buy an insurance ...In Q& A 14.4, advertising increases the probability of high demand to 80%. If all the other information in the Q& A stays the same, what is the minimum probability of high demand resulting from advertising such that Gautam ...If you buy a new car and try to sell it in the first year—indeed, in the first few weeks after you buy it—the price that you get is substantially less than the original price. Use your knowledge about signaling and ...Post your question

0