Reference no: EM131409990
In given Exercise, which company would the investor select if it were using the maximin criterion? The maximax criterion? The minimax regret criterion?
Exercise
An investor is trying to decide between two promising technology stocks to round out his portfolio. The remainder of his portfolio consists of relatively conservative companies and will not enter into his decision as to which technology company will be selected. DiskWorth is a well-established company engaged in the design and manufacture of data storage disks, while ComTranDat is a start-up firm in the midst of developing what could be a wireless communication and data transmission system superior to those currently used or under development by the leaders in its industry.
Depending on whether the technology sector weakens, remains the same, or strengthens over the next 10 years, the investor estimates that his profits with DiskWorth would be $20,000, $30,000, and $40,000, for the respective scenarios. The corresponding profits for ComTranDat are estimated to be $20,000, $10,000, and $90,000, respectively.
If the technology sector has a 20% probability of weakening over the next 10 years, a 50% probability of remaining the same, and a 30% probability of strengthening, which stock purchase should the investor make if he wishes to maximize his expected profits over the 10-year period? What is the most he should be willing to pay for a perfect forecast for the future strength of the technology sector?
Determining the concepts of ethics
: What is the difference between themes, topics, and concepts of ethics?
|
Which stock purchase should the investor make
: If the technology sector has a 20% probability of weakening over the next 10 years, a 50% probability of remaining the same, and a 30% probability of strengthening, which stock purchase should the investor make if he wishes to maximize his expecte..
|
Social interaction and setting you are observing
: Who apparently has the most power in the social interaction and setting you are observing? Explain how they exert their power and privilege. Does their status help them maintain power in the setting and among social interactions?
|
Identify and explain unethical business behavior or practice
: Identify and explain the unethical business behavior or practice. Conduct research about the Unethical Practice and the impact of the practice on the company and stakeholders.
|
Which stock purchase should the investor make
: What is the most he should be willing to pay for a perfect forecast for the future strength of the technology sector?
|
Problem regarding the obesity in america
: Obesity in America is considered an epidemic. There are many contributing factors to obesity (both childhood and adult), such as biological, environmental, social, or economic factors.
|
What is the intent of the mental health court in general
: What is the intent of the mental health court in general? Did the judge make an appropriate decision in this case, and why? What other alternatives would have been more appropriate for this defendant
|
What are five entrepreneurship trends
: What are 5 Entrepreneurship trends (opportunities), briefly describe them in 3-5 sentences in your words with an example of each?
|
Facts about the aca
: Go to the government healthcare website and find three facts about the ACA. List and describe each fact.
|