Question: When you are facing risks, risk aversion people would like to transfer them away. Please identify how can you transfer away the risks and

When you are facing risks, risk aversion people would like to transfer them away. Please identify how can you

Student A purchases a traffic insurance and the ferasures are as following. If the driver knocks down someone

The bond has a price of $1000, maturing in 4 years, the current price is $880. Another investment is to

If you have USD 4 million on hand and facing the exchange rates as following. How much profit can you earn

When you are facing risks, risk aversion people would like to transfer them away. Please identify how can you transfer away the risks and then explain them with examples. Student A purchases a traffic insurance and the ferasures are as following. If the driver knocks down someone else on purpose, no payment. There is a limit of max payment of $15,000. Any fees happened under $1,500 should be covered. by the investors. The investor also needs to pay 20% out of his own pocket. student A causes an accident and a loss of $20,000. How much should he pay in total from his own pocket? The bond has a price of $1000, maturing in 4 years, the current price is $880. Another investment is to deposit the money into bank, they offer an annual interest rate of 7.5%. Which investment will you choose? Please explain your choice with both (1) NPV method and (2) future value method. If you have USD 4 million on hand and facing the exchange rates as following. How much profit can you earn with arbitrage?

Step by Step Solution

★★★★★

3.47 Rating (157 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Answer Here are the answers to your questions 1 Risk aversion people may transfer away risks through various means such as a Diversification Spreading investments across different asset classes or ind... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

How can the interaction of the multiplier and the accelerator explain cyclical fluctuations in national income?

How can you run both the update and upgrade commands in one command line in Linux so that it all operates as one process? perform research on the web and find 3 more things that can be done to make a...

How can a marketer manipulate the social and physical surroundings in a retail store to influence purchasing decisions? How does it work?

An employee earns $24 per hour and 1.5 times that rate for all hours in excess of 40 hours per week. Assume that the employee worked 43 hours during the week. Assume that the FICA tax rate is 7.5%...

The more the Fed accommodates shocks to money demand, the larger the (government) spending multiplier.

What is the difference between disaster recovery and business continuity?

=+44. E-commerce. Quarterly e-commerce retail sales (in millions of dollars) in the United States are provided. (Source: U.S. Census Bureau; www.census.gov.) Use this time series to answer the...

L. R. Updike owns a department store that has a $50,000 balance in Accounts Receivable and a $2,500 credit balance in Allowance for Doubtful Accounts. 1. Determine the net realizable value of the...

Write and execute a Java program that displays one of the following figures on a window. The window must be of size third of screen-width third of screen-height at a location of your choice . You are...

In recent years, Kannada Company purchased three machines. Because of heavy turnover in the accounting department, a different accountant was in charge of selecting the depreciation method for each...

Judy's Boutique just paid an annual dividend of $ 3 . 4 6 on its common stock. The firm increases its dividend by 3 . 2 percent annually. What is the company's cost of equity if the current stock...

ABC Company has current assets of $100,000 and capital assets of $140,000. Current liabilities are $60,000 and long-term liabilities are $90,000. There is $40,000 in preferred stock outstanding and...

Tamarisk Corporation had income from continuing operations of $10,763,000 in 2025. During 2025, it disposed of its restaurant division at an after-tax loss of $201,600. Prior to disposal, the...

Bonita Corporation had income from continuing operations of $10,615,500 in 2025. During 2025, it disposed of its restaurant division at an after-tax loss of $191,900. Prior to disposal, the division...

O'Hara Photography's checkbook lists the following (Click the icon to view the checkbook.) Read the requirements Requirement 1. Prepare O'Hara Photography's bank reconciliation at November 30, 2024....

On January 1, 2022, Blossom Corporation acquired machinery for $1470000. Blossom adopted the straight-line method of depreciation for this machine and had been recording depreciation over an...

PQ 0 4 "Tuleh saboh program java keu tacok N elemen dan tapeugot lagee nyoe: Peutamong awaknyan lam tumpukan saboh - saboh. Bangun tumpukan lam watee linier. Bandengkan watee jalan kedua algoritma...

Before the latest financial crisis and recession, when was the largest recession of the past 50 years, and what was the cumulative loss in output over the course of the slowdown?

Minimum Wage Labor Subsidy (contd): In exercise 13.10, we investigated the firms decisions in the presence of a government subsidy for hiring minimum wage workers. Implicitly, we assumed that the...

In exercise 19.6, we explored the idea of city wage taxes and noted that these were exceedingly rare and occurred primarily in very large cities. We explained this by noting that labor demand and...

In most Western democracies, it is settled law that governments cannot simply confiscate land for public purposes. Such confiscation is labeled a taking and, even when the government has compelling...

11. What are second messengers, and which type of synapse relies on them?

How might it be affected if the nodes were much farther apart?

1. Suppose the threshold of a neuron were the same as its resting potential. What would happen? At what frequency would the cell produce action potentials?