Business, 24.04.2020 23:53 skyvargasov9cad

Willyâs only source of wealth is his chocolate factory. He has the utility function p(cf)^1/2 + (1- p) (cnf) 1/2, where p is the probability of a flood, 1- p is the probability of no flood, and cf and cnf are his wealth contingent on a flood and on no flood, respectively. The probability of a flood is p = 1/13. The value of Willyâs factory is $500,000 if there is no flood and $0 if there is a flood. Willy can buy insurance where if he buys $x worth of insurance, he must pay the insurance company $3x/15 whether there is a flood or not, but he gets back $x from the company if there is a flood.
1. Willy should buy .
A. no insurance since the cost per dollar of insurance exceeds the probability of a flood.
B. enough insurance so that if there is a flood, after he collects his insurance, his wealth will be the same whether there is a flood or not.
C. enough insurance so that if there is a flood, after he collects his insurance, his wealth will be 1/9 of what it would be if there is no flood.
D. enough insurance so that if there is a flood, after he collects his insurance, his wealth will be 1/4 of what it would be if there is no flood.
E. enough insurance so that if there is a flood, after he collects his insurance, his wealth will be 1/7 of what it would be if there is no flood.

Answers: 3

Show answers

Another question on Business

Business, 21.06.2019 20:30

The link between volume of production and the cost of building manufacturing operations is particularly important in industries characterized byanswers: process innovations.product manufacturing.product innovation.process manufacturing.

Answers: 1

Answer

Business, 21.06.2019 21:00

Accublade castings inc. casts blades for turbine engines. within the casting department, alloy is first melted in a crucible, then poured into molds to produce the castings. on may 1, there were 230 pounds of alloy in process, which were 60% complete as to conversion. the work in process balance for these 230 pounds was $32,844, determined as follows: exercises during may, the casting department was charged $350,000 for 2,500 pounds of alloy and $19,840 for direct labor. factory overhead is applied to the department at a rate of 150% of direct labor. the department transferred out 2,530 pounds of finished castings to the machining department. the may 31 inventory in process was 44% complete as to conversion. prepare the following may journal entries for the casting department: the materials charged to production the conversion costs charged to production the completed production transferred to the machining department determine the work in process"casting department may 31 balance.

Answers: 1

Answer

Business, 21.06.2019 21:30

Which of these things did galileo not do? a. stop publishing his scientific work after being convicted of heresy b. invent the concept of acceleration c. experiment with rolling balls down ramps of increasing steepness to test how objects would fall d. argue that earth moves around the sun e. make up a thought experiment that indicated that objects would fall at the same rate

Answers: 3

Answer

Business, 22.06.2019 10:00

Which term best fits the sentence? is the process of reasoning, analyzing, and making important decisions. it’s an important skill in making career decisions. a. critical thinking b. weighing pros and cons c. goal setting

Answers: 1

Answer

You know the right answer?

Willyâs only source of wealth is his chocolate factory. He has the utility function p(cf)^1/2 + (1-...

Questions