a.

getermine nhat is the most BeMa should pay for the qset
if it is classified as
(1) LOW-risk (10%)
3,0D0 3,000
I5,000
3,000 3,000
V C140)4(L1o)
1.10) (-10)2 C1-10)

Vs 18,823. 42

(1) Avorage-risk (157)

3,000 ,000 3,0008,000 5,000
-15) 45 (-15 (1-1s) -16)

Vs o,022.51

(8) High risk (22%)

3,000 ,000 .3,006 15,00D
3,000
Vs (1-22)
(122)2 (1:22) C1-22) .22)

V 13, 030.91
b.
6oced on the asset vdluation findings, Bella must pay

413,090.91, which is the price 0f the high risk asset.

Since he is unable t0 assess the risk, she Nin beneft from
Solecting me lonest pice for the high fiSk.
C
By increasi ng nisk, equired rate of retum inceases Which decreacer
the value of an asset. As shown in item "o, the low -risk asse
vIf a rate of lo7o has fhe higherasref value of $8323.12.
Medn whle, the high-nSk asset wih a rate of 22% has an
assef vglue of only 13,030.9