A portfolio has an expected rate of return of 0.10 and a standard deviation s of 0.20. The risk-free rate is 0.05. Ron has the following utility function: U = E(r) - (A/2)s2. Which value of A makes this investor indifferent between the risky portfolio and the risk-free asset?

a. 6
b. 2.5
c. 4
d. 3.5

Your uncle is considering investing in a new company that will produce high quality stereo speakers. the sales price would be set at 1.5 times the variable cost per unit; the variable cost per unit is estimated to be $75.00; and fixed costs are estimated at $1,200,000. what sales volume would be required to break even, i.e., to have ebit = zero?

Determine if the following statements are true or false. an increase in government spending can crowd out private investment. an improvement in the budget balance increases the demand for financial capital. an increase in private consumption may crowd out private investment. lower interest rates can lead to private investment being crowded out. a trade balance in sur+ increases the supply of financial capital. if private savings is equal to private investment, then there is neither a budget sur+ nor a budget deficit.

Gary lives in an area that receives high rainfall and thunderstorms throughout the year. which device would be useful to him to maintain his computer?