标题: Alternative investments [打印本页] 作者: water2012 时间: 2011-7-13 17:09 标题: Alternative investments
An investor is considering investing in a venture capital project that will have a large payoff at exit, which is estimated to occur in four years. The investor realizes that the risk of failure is high, given the following estimated probabilities:
Year 1 2 3 4
Failure Probability 0.30 0.28 0.28 0.25
The probability that the project will survive to the end of the fourth year is:
A) 25.00%.
B) 27.22%.
C) 27.75%
Answer is B
Is the probability that the project will FAIL at the end of the 4th year?作者: JGovender 时间: 2011-7-13 17:10
Consider it in concext with the conceptual Venture Capital section. Venture capital is highly risky and I think the text even says the success rates are very low, so by definition the failure rates should be very high.
Thus, WILL FAIL is 1 - seccess rate (which should be low).
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Edited 1 time(s). Last edit at Tuesday, December 1, 2009 at 11:55AM by nuppal.
