经济作业代做 Answer all of the following questions 1) An investor has the following utility function of wealth W:Calculate the measures of absolute and ···
Answer all of the following questions 经济作业代做
1) An investor has the following utility function of wealth W:
Calculate the measures of absolute and relative risk aversion (ARA and RRA). Comment on your findings. (20 marks)
2) The investor in 1) wants to choose one out of two mutually exclusive assets A and B. The probability distributions of their future payoffs are presented in the following payoff table.
|Asset A||Asset B|
|Probability||Payoff (£)||Probability||Payoff (£)|
Explain the investor’s asset choice based on expected utility and stochastic dominance theory, as well as mean-variance criteria. Show your work. (30 marks)
3) There are two assets C and D in the market. Their future payoffs are presented below. There are two equally likely states of nature.
|Asset C||Asset D|
|State||Payoff (£)||Payoff (£)|
Discuss the state preference theory framework and calculate the prices of the pure securities. (20 marks)
4) Suppose all market investors are risk averse and able to construct investment portfolios with N risky assets in a frictionless market where unlimited lending and borrowing at the risk free rate (Rf) is possible. Illustrate and explain investor choice of portfolios in terms of portfolio mean return (E(Rp)) and variance (. (30 marks)
Overall word limit: 1,500 words maximum.
MARKING GUIDELINES 经济作业代做
Performance in the formative assessment for this module is judged against the following criteria:
- Relevance to question(s)
- Organisation, structure and presentation
- Depth of understanding
- Analysis and discussion
- Use of sources and referencing
- Overall conclusions
PLAGIARISM AND COLLUSION 经济作业代做
Students suspected of plagiarism, either of published work or the work of other students, or of collusion will be dealt with according to School and University guidelines.