Two Coworkers Are Assigned To The Same Project In Order For The Project To Succeed 2630033

, ou A ly A sttwk broker Ik.’110 is giveii 10,000 to in-vest in StockS (you have to invest all of it.) There are f wo stocks to choose from. 0 3p0._ Stock B can be be purchased at price $500, purchased final value of the portfolio: t stocks are independent of each $500. and its final price, p.8 has expected value 550 a.i.AL . rr other,,;,,,,, _c,,,, final price, pA has expected 1-alue 600 an ,4 — varia nCce otock A can our ——–woffp . ‘1,..0 srnean-variance utility oavetrprtiiicee and its EU = Ely] _ 1__.7Var[V] 2 with risk aversion y =– 3. Assume that you canpurchase fractions of stocks. 11. Suppose you invest $3.000 in Stock A and S7,000 in Stock B. What is the expected written as V ,—– pAqA + pBqB). final value of this portfolio, Erifi? (Hint: The final value of the Portfolio can be (A) $23000 (B) X886 3.64C $11300(D) $10000 12. What is the variance of the final value of this portfolio, Var[Vi? (A) 75000 (B) 3395.4 (C) 4600 (D) 50000 13• How much should you choose to invest in Stock A, to maximize the expected utility of your client? (A) $4000.03 (B) $4016.67 (C) $8.03333 (D) 35000
14. Two coworkers are assigned to the same project. In order for the project to succeed, one of the coworkers needs to take a leadership role and one needs to take a supporting role; otherwise the project will fail. Conditional on project success, both coworkers prefer taking the leadership role, but having the project fail is worse for everyone. Which game best describes this situation? (A) Matching Pennies (B) Stag Hunt ) Chicken



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