(at the track) at the horse races one saturday afternoon gavin jones studies the racing form and concludes that the horse no arbitrage has a 25% chance to win and is posted at 4 to 1 odds. (for every dollar gavin bets, he rece $5 if the horse wins and nothing if it loses.) he can either bet on this horse or keep his money in his pocket. gavin decides that he has a square-root utility for money. (a) what fraction of his money should gavin bet on no arbitrage? (b) what is the implied winning payoff of a $1 bet against no arb

The former chairman of the federal reserve, alan greenspan, used the term "irrational exuberance" in 1996 to describe the high levels of optimism among stock market investors at the time. stock market indexes such as the s& p composite price index were at an all-time high. some commentators believed that the fed should intervene to slow the expansion of the economy. why would central banks want to clamp down when the economy is growing? a. to block the formation of unsustainable speculative asset bubbles. b. to curtail excessive profits in the banking system. c. to prevent inflationary forces from gathering momentum. d. all of the above. e. a and c only.