Question: Ann is a real estate developer. Today, Ann has 200 apartments under construction which will be completed at the end of 9 months. The current

Ann is a real estate developer. Today, Ann has 200 apartments under construction which will be completed at the end of 9 months. The current market condition allows Ann to sell each apartment at $5.5 million comfortably. Ann figures that the price variance is 0.6 for the next 9 months. Anns risk aversion factor is 0.01. If Ann decides to sell 130 apartments today, the expected future price is nearest:

Select one:

a. $5.92m

b. $5.52m

c. $5.82m

d. $5.62m

e. $5.72m

Clear my choice

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