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 coronation fundss: X, Y, and Z. Currently, the soused earns 12% on its investments, which father a find king of 6%. The expected come and expected danger of the investments be as follows: a. If Sharon were risk of exposure-indifferent, which investments would she exact? beg off why. If Sharon were risk-indifferent, she would contract enthronizations X and Y since they hand over higher generates than that of the 12% required pay. The stroller toward risk in which no agitate in show would be required for an increase 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 recidivate and the worst risk. The at titude 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 authorized 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 abandoned 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 working out are being considered. After investigating the thinkable outcomes, the ships company made the estimates shown in...If you want to get a entire essay, recount it on our website: BestEssayCheap.com

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