Question
A new entrepreneur is relatively risk-averse with a risk-adjusted constant = 2. Her opportunity cost is $100,000 before earning a regular salary from the venture
A new entrepreneur is relatively risk-averse with a risk-adjusted constant = 2. Her opportunity cost is $100,000 before earning a regular salary from the venture in its second year. She also invests her savings of $50,000. Calculate the minimum annual return that will be acceptable to her in the second or third year.
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