Fin/419 Week 2 Ind

week ii Individual Assignment FIN/419 July 30, 2012 Jeffrey Leeson Week Two Individual Assignment P53 Risk preferences Sharon Smith, the monetary manager for Barnett Corporation, wishes to measure three prospective enthronization fundss: X, Y, and Z. Currently, the firmly earns 12% on its investments, which father a find mightiness of 6%. The expected come and expected essay of the investments atomic number 18 as follows: a. If Sharon were gamble-indifferent, which investments would she contract? beg off why. If Sharon were risk-indifferent, she would set apart investitures X and Y since they wee higher generates than that of the 12% required topic. The mission toward risk in which no agitate in guide would be required for an outgrowth in risk (Gitman, 2009). b. If she were risk-averse, which investments would she select? Why? If Sharon were risk-averse, she would select Investment X since it has the highest final payment and the utmo st risk. The attitude toward risk in which an change magnitude return would be required for an increase in risk (Gitman, 2009). c. If she were risk-seeking, which investments would she select? Why? If Sharon were risk-seeking, she would select Investment Y and Z since they have a higher risk without an increased return.

The attitude toward risk in which a decreased return would be authoritative for an increase in risk (Gitman, 2009). d. Given the traditional risk preference behavior exhibited by financial managers, which investment would be preferred? Why? Most managers are risk-averse; for a given(p) increase in risk, they require an increase ! in return (Gitman, 2009). Since most financial managers are risk-averse, the preferred investment is Investment X. Investment X provides the increase in return for an increase in risk. P54 Risk analysis solar Designs is considering an investment in an expanded product line. Two feasible types of refinement are being considered. After investigating the thinkable outcomes, the telephoner made the estimates shown in...If you want to get a entire essay, position it on our website: BestEssayCheap.com

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