Expected utility maximizer, Applied Statistics

The investor has constant wealth 1 and is o?ered 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+3α = 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 α for this investor? ( α must be between 0 and 1).

Posted Date: 3/9/2013 12:23:56 AM | Location : United States







Related Discussions:- Expected utility maximizer, Assignment Help, Ask Question on Expected utility maximizer, Get Answer, Expert's Help, Expected utility maximizer Discussions

Write discussion on Expected utility maximizer
Your posts are moderated
Related Questions
Application of the chi Square Test

The file Midterm Data.xls has a tab labeled "Many vs. S&P" which presents historical price data for several assets, a volatility condition (VIDX = 1 if the NYSE volatility is grea

Suppose the money supply process is now represented by the following function: where m measures the sensitivity of money supply with respect to the interest rate. (i) Us

A) The three images shown below were blurred using square masks of sizes n=23, 25, and 45, respectively. The vertical bars on the le_ lower part of (a) and (c) are blurred, but a c

for this proportion, use the +-2 rule of thumb to determine the 95 percent confidence interval. when asked if they are satisfied with their financial situation, .29 said "very sat

The data in the data frame asset are from Myers (1990), \Classical and Modern Regression with Applications (Second Edition)," Duxbury. The response y here is rm return on assets f

Coefficient of Variation The standard deviation discussed above is an absolute measure of dispersion. The corresponding relative measure is known as the coefficient of vari

Problem: A survey usually originates when an individual or an institution is confronted with an information need and the existing data are  insufficient. Planning the questionn

mark number of student 0-10 4 10-20 8 20-30 11 30-40 15 40-50 12 50-60 6 calculate frequency distribution

Pneumatic Actuator Design Matrix: The range of actuator design parameters have been provisionally assessed and are presented in Table. You are required to determine the following