Estimated profit of typical start-up businesses, Macroeconomics

Typical start-up businesses' estimated profit are forecasted as following:

State

Bad

Good

Probability

81%

21%

Profit

-3.5M

16M

A. Quantitatively prove that even with obvious likelihood of failure, a person could rationally justify chasing such a risky entrepreneurial proposition.

B. Consider the case of two economies-one with two start-ups and another with four start-ups whose fortunes are completely separate of each other.  Quantitatively prove that the distribution of the wealth for the economy becomes much more normally distributed than each start-up's especially as the number of start-ups rises.

C. Argue factually what the results imply for the macro policy towards angel/venture capital investing.

 

Posted Date: 3/21/2013 2:13:25 AM | Location : United States







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