Question: What are the equations for measuring return and risk?

A risk-averse investor will: a. Always accept a greater risk with a greater expected return b. Only invest in assets providing certain returns c. Sometimes accept a lower expected return if it means less ri d. Never accept lower risk if it means accepting a lower expected return

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Solve (d) and (e) please.

Discuss: i) diversifiable risk; ii) market risk; iii) systematic risk iv) unsystematic risk;

Suppose that you are asked to forecast future stock prices for Tesla, so you proceed tocollect all available information. The day you announce your forecast, Toyota announce abrand-new plan to merge and reshape the structure of the electric carts industry. Wouldyour forecast still be considered optimal? Discuss.

"Your company is comparing three projects that have risks associated with them. Based on the data in the foliowing data in the table, which should be chosen? Project A Project B Project C Probability 0.3 EUAW Probability 0.3 0.2 EUAW EUAW -$2,400 $2,000 $3,500 $3,000 -$2,300 $3,800 Probability 0.1 0.4 -$5,500 $7,200 $1,900 0.45 0.25 0.5 0.5

1. Individual Problems 17-1 Malaysia You're the manager of global opportunities for a U.S. manufacturer that is considering expanding sales into Asia. Your market research has identified the market potential in Malaysia, the Philippines, and Singapore as described in the following table:   Success Level Big Mediocre Failure Malaysia       Probability 0.7 0.1 0.2 Units 1,300,000 416,000 0 Philippines       Probability 0.2 0.3 0.5 Units 600,000 360,000 0 Singapore        Probability 0.4 0.3 0.3  Units 1,500,000 750,000 0   The product sells for $20, and each unit has a constant marginal cost of $16. Assume that the (fixed) cost of entering the market (regardless of which market you select) is $500,000. In the following table, enter the expected number of units sold, and the expected profit, from entering each market. Market Expected Number of Units Sold Expected Profit Malaysia     Philippines     Singapore…

3. The risk free rate is 3%. The optimal risky portfolio has an expected return of 9% and standard deviation of 20%. Answer the following questions.  (a)  Assume the utility function of an investor is U = E(r) − 0.5Aσ2. What is condition of A to make the investors prefer the optimal risky portfolio than the risk free asset? (b)  Assume the utility function of an investor is U = E(r) − 2.5σ2. What is the expected return and standard deviation of the investor’s optimal complete portfolio?

What term do economists use to describe the tendency for people to prefer certain outcomes over risky situations? a. The precautionary principle b. Risk differentiationc. Risk uncertainty d. Risk aversion e. Risk management