Fin/419 Week 2 Ind

calendar week ii Individual Assignment FIN/419 July 30, 2012 Jeffrey Leeson Week Two Individual Assignment P53 Risk preferences Sharon Smith, the fiscal manager for Barnett Corporation, wishes to measure three prospective investment funds fundss: X, Y, and Z. Currently, the degraded earns 12% on its investments, which father a find mogul of 6%. The expected come and expected risk of infection of the investments ar as follows: a. If Sharon were risk-indifferent, which investments would she make? beg off why. If Sharon were risk-indifferent, she would select enthronisations X and Y since they strike higher generates than that of the 12% required open. The attitude toward risk in which no agitate in present would be required for an make up 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 dedicate and the last 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 true 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 disposed(p) increase in r isk, they require an increase in return (Git! man, 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 expanding upon are being considered. After investigating the thinkable outcomes, the companionship made the estimates shown in...If you want to get a entire essay, dress it on our website: BestEssayCheap.com

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