Suppose that a person won the Florida lottery and was offered a choice of two prizes: (1) $500,000 or (2) a coin-toss gamble in which he or she would get $1 million if a head were flipped and zero if a tail.
a. What is the expected dollar return on the gamble?
b. Would the person choose the sure $500,000 or the gamble?
c. If he or she chooses the sure $500,000, is the person a risk averter or a risk seeker?
Construct an equal Construct an equal-weighted (50/50) portfolio of investments B and D. What is the expected rate of return and standard deviation of the portfolio? Explain your results
10.3 construct an equal weighted (50/50) portfolio of investments b and c. what is the expected rate of return and standard deviation of the portfolio? Explain the results.
Construct an equal weighted 50/50 portfolio of investment B and D. What is the expected rate of return and standard deviation of the portfolio? Explain the result.