Question: Draw the cumulative risk profile Question 4. (20 Consider the problem by cbt, p 0.7 and q 0.2. Let Xl be st ond X, 20

Draw the cumulative risk profile

Question 4. (20 Consider the problem by cbt, p 0.7 and q 0.2. Let Xl be st ond X, 20 10 (a) (8 pts) Draw the cumulative risk profile for each strateg. (b) (12 pts) Label the following four statements as either TRUE or FALSE. is required.) (1) Strategy S2 deterministically dominates Sl. (2) Strategy .52 stochastically dominates Sl. (3) The expected payoff of is greater than the expected payoff of (4) It is possible to find an increasing g(.) such that >

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