, - ---- --- - -,----u.-v.u.u. va. uLL ulVLOLUL ID ItJUJ. LlUllU avoid risk? 9. Why do some investors put a large portion of their portfolios into
Can someone please help me answer questions number 1 , 3 and question 9. I will tip 5 dollars!!
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, - ---- --- - •-•,--•--u.•-v.u.u. va. uLL ulVLOLUL ID ItJUJ. LlUllUavoid risk?9. Why do some investors put a large portion of theirportfolios into risky assets While others invest largelyin risk-free alternatives? (Hint: Do the two investorsreceive exactly the same return on average? If so, Why?)EXERCISES1. Consider a lottery With three possible outcomes:• $125 Will be received With probability •2• $100 Will be received With probability .3• $50 Will be received with probability .5a. What is the expected value of the lottery?b. What is the variance of the outcomes?c. What would a risk-neutral person pay to play thelottery?2. Suppose you have invested in a new computerpany Whose profitability depends on Mo (ile)mrlwnl-lwor Q annvrnnn nannnn n L---.'£f
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