Microeconomic的Reducing Risk - 經濟

學校:UIC

教師: G. Bassett

科目:Microeconomics for Business Decisions

題目:
1. How does the diversification of an investor’s portfolio avoid risk?

2. Consider a lottery with three possible outcomes: $100 will be received
with probability .1, $50 with probability .2, and $10 with probability .7.
a. What is the expected value of the lottery?
b. What is the variance of the outcomes of the lottery?
c. What would a risk-neutral person pay to play the lottery?

3. Suppose you have invested in a new computer company whose profitability
depends on (1) whether the U.S. Congress passes a tariff that raises the cost
of Japanese computers and (2) whether the U.S. economy grows slowly or
quickly. What are the four mutually exclusive states of the world that you
should be concerned about?

我的想法:
1.There is an old saying: “Don’t put all your eggs in one basket.” That
’s the diversification: Allocating your resources to a variety of activities
whose outcomes are not closely related. Risk can be minimized by
diversification- by allocating your time so that you sell more products
rather than a single product. However, diversification is not always this
easy. Whenever sales of one are strong, sales of the other are weak. But the
principle of diversification is a general one: As long as you can allocate
your resources toward a variety of activities whose outcomes are not closely
related, you can eliminate some risk.

2. a. E(X) = Pr1X1 + Pr2X2
0.1*100+0.2*50+0.7*10=27
b. 0.1*(100-27)2 +0.2*(50-27)2 +0.7*(10-27)2= 532.9+105.8+202.3=841
c. It depends. Because a risk-neutral person shows no preference between a
certain income, and an uncertain one with the same expected value.

第三題 我有答案了:) 感激各方大德

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