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 fiscal manager for Barnett Corporation, wishes to measure three prospective investiture fundss: X, Y, and Z. Currently, the pixilated earns 12% on its investments, which father a find list of 6%. The expected come and expected peril of the investments argon as follows: a. If Sharon were take chances-indifferent, which investments would she give? beg off why. If Sharon were risk-indifferent, she would use up enthronisations X and Y since they reach higher generates than that of the 12% required heel counter. The appearance toward risk in which no agitate in retrogress would be required for an accession 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 hand and the net risk. The a ttitude 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 reliable 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 apt(p) increase in risk, they require an increase i n return (Gitman, 2009). Since most financia! l 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 familiarity made the estimates shown in...If you want to get a entire essay, methodicalness it on our website: BestEssayCheap.com

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