Typical start-up businesses' estimated profit are forecasted as following:
|
State
|
Bad
|
Good
|
|
Probability
|
81%
|
21%
|
|
Profit
|
-3.5M
|
16M
|
A. Quantitatively prove that even with obvious likelihood of failure, a person could rationally justify chasing such a risky entrepreneurial proposition.
B. Consider the case of two economies-one with two start-ups and another with four start-ups whose fortunes are completely separate of each other. Quantitatively prove that the distribution of the wealth for the economy becomes much more normally distributed than each start-up's especially as the number of start-ups rises.
C. Argue factually what the results imply for the macro policy towards angel/venture capital investing.