You work at a large pension fund and are in charge of risk preference research for a group of 50-year-olds. You've asked them to compare two investment options. Option A: they can invest all of their savings into the risk-free asset, which earns 1.5% annual interest. Option B: they invest all of their savings into a stock portfolio that has a risk premium of 7% and a standard deviation of 24%. If the group is indifferent between these two options, what is their level of risk aversion

Amanufacturing firm is considering overhauling the existing compensation strategy. currently every front line employee who works on the assembly line earns the same hourly wage. ideally, management would like to institute a new pay system that involves pay-for-performance. which of the following recommendations is both consistent with scientific management's general emphases and generally good advice for management of this firma. the firm should adopt a differential pay system with one pay level for average performance, and a higher level for good performance. b. the firm should adopt a differential pay system, but the firm should modify it from its original design and provide many different levels of pay associated with different performance levels. c. the firm should understand worker psychology and to focus on pay as the key motivator. d. all of the abovee. none of the above