An individual has utility function U(x)=x1/4U(x)=x1/4 for salary, and is considering new job offer which pays $80,000 with a bonus. The bonus will be $0, $10,000, $20,000, $30,000, $40,000, $50,000, or $60,000, each with equal probability. What is the certainty equivalent of this job offer?

Answers

Answer 1

Answer:

108,280.22

Explanation:

Certainty equivalent is solved by taking the inverse utility function from the expected utility of a random wealth variable

U(x) = x^1/4

U^-1(x) = x^4

U^-1(x) === x^4

CE(x) = x^4

Salary   Bonus   Total income   U(x)= x^(1/4)       P(x)        U(x)*P(x)

80000       0          80000               16.82                1/7             2.4

80000    10000     90000               17.32                1/7            2.47

80000    20000    100000              17.78                1/7            2.54

80000    30000    110000               18.21                 1/7            2.6

80000    40000    120000              18.61                 1/7            2.66

80000    50000    130000              18.99                1/7            2.71

80000    60000    140000              19.34                1/7             2.76

Sum                                                                                             18.14

CE(x) =  18.14^4

CE(x) = 108280.22

So therefore,  the certainty equivalent of this job offer is 108,280.22


Related Questions

A healthcare organization’s insurance coverage is:

the amount that the insurance company will pay for costs associated with risks

the amount that the healthcare organization pays to the insurance company

the amount that the healthcare organization pays for costs associated with risks

the amount that the healthcare organization will pay for a legal case

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Answer:

A

Explanation:

the answer to this question is a

Answer:

A

Explanation:

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correct on Edge

A marketing plan documents how to focus marketing efforts. In good marketing strategy, what's at the center of all the efforts?

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Answer:

★ The answer is CUSTOMER

Explanation:

Hope you have a great day :)

what is meant by recession

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Answer:

Spatial recession in paintings is the relationship between objects which appear to lie near to the observer and those which seem further away, and thus recede into space. ...

Explanation:

HELP PLEASE:)
to get the most accurate savings figures, which item should you vary when you are comparing 2 loans from separate banks?
A. the APR should be different
B. the number of years it takes to pay it off
C. fixed and variable rates
D. nothing should be varied

Answers

I Think its answer C: Fixed and Variable rates

Give very short answers to the following questions:
1. What do you know about an office ?
2.
What does chalani mean?
3. What does darta mean?
4 How can you say that office is an information centre ?​

Answers

Answer:

1-place where any formal operations are done

2-chalani means to make somebody pay fine

3-darta refers to listing of something as name (registration )

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How would inventions such as the smart fitting room affect retail jobs???

Answers

Answer:

ummm because it is bigger

Explanation:

Which task is common to both restaurant and lodging workers, but not to recreation workers?
handling money
O taking reservations
motivating and teaching
O preparing food and drink

Answers

Answer:

its D

Explanation:

im on the test/ exam

Answer A

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Which qualifications are most helpful for Early Childhood Development and Services Careers? Check all that apply

independence
computer skills
physical strength
financial skills
adaptability
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Answer: physical strength, adaptability, and teaching skills

Answers

Answer:

C, E, F

Explanation:

got it right

Answer:

C,E,F

Explanation:

The other guy was right so I had to assure you it was right

(02.01 MC)

HELP ASAP!!! Maxine notices her favorite brand of running shoes are on sale for 50% off retail price. Though she is on a strict budget, she decides to purchase two pair. Maxine's decision was most influenced by

her preference for another brand

the fact that her income is limited

the price of a competing brand of shoes

the sale price of the running shoes

Answers

The sale price of running shoes

Answer: D) the sale price of the running shoes

Explanation: Im him

Which best describes inserting a table using the Table Gallery?

The user can click on Insert Table.
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The user can make a quick selection of the number of rows and columns present.
The user can click to use an Excel spreadsheet.

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Answer:

2

Explanation:

What is The movement of the economy from
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Answers

Answer:

Business Cycles is the right answer

Explanation:

Will mark as brainliest !

What is free enterprise?

A. The ability to tap into government funds to start up a business
B. The opportunity to start up and run a business for free
C. The freedom from business taxes and regulations
D. The opportunity for an individual to start up and run a business of
his or her choice

Answers

Answer is D. Many people today start enterprises today as they are much easier to control and handle than companies and are less costly

The statement, ''The opportunity for an individual to start up and run a business of his or her choice.'', is the one that correctly provides for the description of a free enterprise system. Therefore, the option D holds true.

What is the significance of the system of free enterprise?

A free enterprise can be referred to or considered as a system of setting up a business organization, which does not have any form of restrictions before the commencement of the business activities. There are no regulations from the government at least.

The system of free enterprise exists in a society where the government wants to promote the growth and development of its economy, and feels that it is inefficient to take the control of trade and business of the economy in its own hands.

Therefore, the option D holds true and states regarding the significance of a free enterprise.

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3 Is there any way to enjoy some small daily purchases and also make wise, long-term decisions when it

comes to spending and saving? If so, how?

Answers

Answer:

The answer is below

Explanation:

To be able to enjoy some small daily purchases and also make wise, long-term decisions when it comes to spending and saving, you will need to take the following steps:

1. Ensure you have a plan: this will describe your short term and long term goals about your finances

2. You can start with an 80%/20% rule. Here, you spend 80% of your income and save 20%. You can increase that later to 70/30%

3. After sometimes, invest 80% of your savings and keep 20%

4. Use credit when only necessary

5. Enjoy yourself sometimes by spending the money for yourself adequately.

6. Keep learning how to maximize your income.

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Answers

Answer:

It can help you to understand ideal customers and the target audiences

Explanation:

Market segmentation is important due to the following reasons:

1. It can help you to understand ideal customers and the target audiences

2. Market segmentation helps to provide content to the target people in the proper way.

3. Market segmentation allows companies to understand customer's needs, wants, preferences and behaviors.

Pete and Shirley are filing a joint return. They have two dependent children. What is the total amount of their exemptions for tax year 2019?

Answers

Answer: $16,800

Explanation:

As regards them having two children, their individual taxes is $8,400 for a year. The total amount of their exemptions for tax of 2019 is $16,800

Guya paid 20% more for a name-brand entertainment system than a generic one would have cost.assuming the generic system was $400, how much did he pay for his entertainment system

Answers

Answer:

$480

Explanation:

Find 1% of the cost.

100% = 400

1% = 400 ÷ 100 = 4

Since they are asking for entertainment system, which costs 20% more than the generic, find out 120%.

120% = 4 x 120 = 480

Using _____ information will help you determine whether an industry is expected to increase employment.


career outlook

average wage

career description

employer benefit

Answers

Career outlook is the correct answer
the answer is career outlook

PLS HELP!!! What is the meaning of Customer Relationship Management (CRM)?
O CRM means assisting customers by answering their questions and helping resolve issues.
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necessary
CRM is a class that customer service professionals take to learn strategies for managing customers.
CRM means collecting information about the customer for the purpose of improving their future
experience.

Answers

Answer:

CRM means collecting information about the customer for the purpose of improving their future experience.

Explanation:

CRM is an acronym for customer relationship management and it typically involves the process of combining strategies, techniques, practices and technology so as to effectively and efficiently manage their customer data in order to improve and enhance their satisfaction.

CRM means collecting information about the customer for the purpose of improving their future experience.

Answer:

CRM means collecting information about the customer for the purpose of improving their future experience.

Explanation:

Corporate social media pages describe the what of the company

Answers

Business info.

We all need to know just how trustable a company is and how to contact them from time to time. Also without it we wouldn't know how these media platforms worksssssssssssssssssssssss.

-Ɽ3₮Ɽ0 Ⱬ3Ɽ0

Before supplier relationship management (SRM), buyers typically spent 40% of their time on expediting orders. After SRM implementation buyers spent about:a. 30% of their time on expediting ordersb. 20% of their time on expediting ordersc. 10% of their time on expediting ordersd. None of these choices are correct

Answers

Answer: c. 10% of their time on expediting orders

Explanation:

Supplier relationship management is an approach to evaluate or assess supplier's contributions to businesses with the aim of improving the business and grow relationship between both parties. The supplier relationship management has helped buyers spend just 10% of their time on expecting orders.

How do you think business impact suppliers and investors in terms of capital and income​?​

Answers

Answer:

It is important to select suppliers carefully as suppliers can affect the businesses they provide goods to. If a supplier provides a poor quality product to a firm, it may affect the firm's reputation as the firm will need to use the goods or sell them onto their customers.

Explanation:

Suppliers are the most important link in the business chain. They can never be separated from the business itself as they act as the most important intermediary for owners and consumers.

On the other hand, investors get impacted the most as the share price of the companies are hugely impacted by the performance of the business and are appreciated when the business posts excellent results in its annual or quarterly period.

A business can impact suppliers in a way that if the manufacturers are not ready with the finished goods, the supply chain will automatically be stopped which will reduce sales by a good number.

On the other hand, Investors are the owners of the business for the part of no. of shares being held by them. However the management of the business is in the hands of the managers and if they don't run the business well, the stock prices would decline resulting in dismay for the investors.

Suppliers as well as investors are directly related to the performance of the company as efficient management by the business leads to betterment of them and vice versa.

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What is the purpose of international trade and how does it help the countries involved in it?

Answers

Answer:

the trade without border is

international trade.it purposes to share goods ,ideas,resources, etc.

it helps country in the time of need.

Answer:

Global trade makes it possible for people living in one country to use products from another country, allowing them to benefit from products that are not domestically produced. If a country is endowed with abundant labor or favorable climatic conditions, it has an advantage over the nations that do not have them. It makes economic sense to produce and export goods that other countries cannot produce as cheaply. This way, the exporters can increase sales with foreign commerce and strengthen their country’s economy, while earning profits at the individual level. It also helps strengthen the foreign currency reserves of the country.

International trade is a key driver in regulating foreign currency rates. Global trade helps balance a country’s cyclical pattern of trade deficit and surplus. When a country’s currency is strong, its imports tend to exceed its exports, thus creating a trade deficit for the importer. This situation leads to the exporter country’s currency strengthening and the importer’s currency eventually weakening. Over time, a role reversal happens with exports overtaking imports, thus strengthening the exporter’s currency and creating a trade surplus for the importer. Many other factors influence this cycle too, for example, product cost inflation and interest rates. Global trade removes boundaries and makes the whole world into a single marketplace, and that can work to the benefit of all the participating partners.

Explanation:

PLATO answer!

Can you think of a bad decision from your own school or work experience, or from recent business or political news stories, that was made in an effort to correct or justify a past decision?

Answers

Answer:

Explanation:

Personal Experience:

One time I had to turn in an assignment for the company that I worked for which needed to be done and turned in by the end of the workday. I failed to do so due to family issues. This assignment was incredibly important and failure to turn it in would have cost the company a lot of money. So I stayed up all night and finished the assignment. I ended up breaking into the office in the middle of the night to turn it in before the boss found out. It was a bad decision since I could have gotten arrested or fired.

In the following pictograph, how many books has Group 3 read?



18
25
15
12

Answers

Answer:

15 is the answer you are looking

It’s important to consider whether you should address an acquaintance formally or informally.


False

True

Answers

Answer:

True

Explanation:

Im sorry please forgive me I messed up big time

PLEASE HELP!!!
Market research can help entrepreneurs gain insight into viewpoints and opinions about a new product.
O True
O False

Answers

Answer:

True

Explanation:

Market research can be defined as a strategic technique or tool that is typically used by entrepreneurs or business owners to gather information about a particular product. This is to enable them get an insight into buying patterns, requirements or choice and location of the target market (consumers).

When a market research is done properly, it is essentially an effective tool to help plan a business to grow and develop significantly with time.

Hence, market research can help entrepreneurs gain insight into viewpoints and opinions about a new product because it interconnects the manufacturer, consumer and the finished goods or services.

Additionally, market research can be used to gather specific information about rival companies in the same market (industry) and monitor market trends with respect to price.

What reasons might people have to go into debt? Give two examples.
HRGGGGGHH

Answers

Answer:

There are several reasons we accumulate debt, like paying for unforeseen emergencies or unemployment.

answer:

1. spending a large amount of money on a credit card 2. having children or moving into a new house

Tyreek pitches four investors. They agree to each invest $25,000 and value Tyreek's company at 200,000. How much of the company will Tyreek still own after the investment?

a) 41%
b) 45%
c) 50%
d) 56%

Answers

Answer:

50%

Explanation:

The percentage of the company which Tyreek will still own after the investment can be calculated as follows:

Value of Tyreek's company = $200,000

Total amount contributed by the four investors = $25,000 * 4 = $100,000

Let P represents the percentage of the company which Tyreek will still own after the investment.

Therefore, we have:

P = (Total amount contributed by the four investors / Value of Tyreek's company)

P = ($100,000 / $200,000)

P = 0.5 or 50%

Therefore, the percentage of the company which Tyreek will still own after the investment is c) 50%.

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Hailey, a lawyer on the staff of International Group, always considers the consequences of an action rather than the nature of the action itself when making ethical decisions in a business context. Hailey is applying



the utilitarian theory of ethics in business contexts.

religious beliefs in business contexts.

Kantian ethics in business contexts.

the principle of rights theory of ethics in business contexts

Answers

Answer:

the utilitarian theory of ethics in business contexts.

Explanation:

According to the Utilitarian theory of ethics, the steps to be chosen by any business of entity should rely on maximizing the good and minimizing the sufferings. Also, at the same time, the benefit or good to the maximum is required to be considered before taking any decision.  

In the given excerpt, Hailey adopts the utilitarian theory of ethics by focusing on the outcome of the steps that he take.

According to Archbishop John Foley, what three standards does the church set forth for marketers?

Answers

One is truth: Always tell the truth. The second one is the dignity of the person, so don't exploit people. And the third principle is the common good that advertising should serve the common good.

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