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.