Determine the optimal for investor, Risk Management

The investor has constant wealth 1 and is offered to invest in shares of a project that either gains 3/2 or loses 1 with equal probabilities. Therefore, if the investor obtains shares of this project his wealth is 1+3 α/2 with probability 1/2 and 1- α with probability 1/2. The investor is an expected utility maximizer with utility index u(z) = ln z. What is the optimal for this investor? (α Must be between 0 and 1).

Posted Date: 3/13/2013 5:43:07 AM | Location : United States







Related Discussions:- Determine the optimal for investor, Assignment Help, Ask Question on Determine the optimal for investor, Get Answer, Expert's Help, Determine the optimal for investor Discussions

Write discussion on Determine the optimal for investor
Your posts are moderated
Related Questions
The project life cycle programme from the outline planning permission through subsequent scrutiny, design, tender, construction, commissioning and handover. It should justify and r

1. You are given the following long-run annual rates of return for alternative investment instruments: US Government T-Bills 3.5% Large-cap common stocks 12.1% Long-

a) Discuss the post loss objectives that would help the firm recover

Determine about the Market Risk Variability in a security's returns resulting from fluctuation in aggregate market is called market risk. Market risk is sometimes used synon

1. You are to analyze:  [1] internal financial options offered to employees as a benefit, [2] the external financial options that are offered by markets to outside investors who ma

Q. Show Additively of betas? it is indicated earlier that any risk unique to an individual security can be removed by diversification, however as diversification increases, the

Question: (a) Explain the term Risk assessment and outline the provision of the Occupational Safety and Health Act 2005 with respect to risk assessment. (b) Risk Assessment

QUESTION Mybank Commercial Bank is a global conglomerate with operations in more than 10 countries and with more than 25,000 employees across the globe. The bank's technology t

Determine a process for communicating, resourcing and managing risk management strategies Establish a communication plan to implement the risk management framework that has been

what are the characteristics of hedgeable risks