4. Under frost-free conditions, Cal Cultivators expects its strawberry crop to have a $60,000 market value. An unprotected crop subject to frost has an expected market value of $40,000. If Cal protects the strawberries against frost, then the market value of the crop is still expected to be $60,000 under frost-free conditions and $90,000 if there is a frost. What must be the probability of a frost for Cal to be indifferent to spending $10,000 for frost protection?

5. Questo borrowed $100,000 from a bank on a one-year 8% term loan, with interest compounded quarterly. What is the effective annual interest rate on the loan?

Length: 1 Excel Spreadsheet

Upload your document and click the Submit to Dropbox button.