PROBLEM SET 4 1) Consider the following utility functions‚ where W is wealth: (a) U (W ) = W 2 1 (b) U (W ) = W (c) U (W ) = −W (d) U (W ) = W (e) U (W ) = ln(W ) (f) U (W ) = W 1−γ ‚ with γ = 2 1−γ How likely are each of these functions to represent actual investor preferences? Why? 2) Suppose investors have preference described by the following utility function with A > 0: U = E(r) − 1 Aσ 2 2 Each investor has to choose between three portfolios with the following characteristics:
Premium Risk aversion Utility Investment
Problem Set 1 Complete all questions listed below. Clearly label your answers. 1. The receipts and year of release of the five movies with the largest nominal box office revenues‚ along with the CPI data of each year are presented below. Assuming that the receipts for each of the movies were derived during their year of release‚ convert the receipts for each to real dollars for the year 2010 (2010 CPI 230.1). Put the movies in order from largest to smallest real box office receipts and show
Premium Economics Inflation Unemployment
Problem Set 1 Problem 1 Which project should the firm select? Why? Project B: Managers should try to maximize their stock’s intrinsic value while also bringing in revenue. The P/E ratio shows the dollar amount investors will pay for $1 of current earnings. Problem 2 If most investors expect the same cash flows from Companies A and B but are more confident that A’s cash flows will be closer to their expected value‚ which company should have the higher stock price? Explain. The primary
Premium Stock Stock market Shareholder
Other information: Setup costs vary with the number of batches processed in each department. The budgeted number of batches for each product line in each department is as follows: Trophies Plaques Forming department 40 116 Assembly department 43 103 Supervision costs vary with direct labor costs in each department. 1. Calculate the budgeted cost of trophies and plaques based on a single plant-wide overhead rate‚ if total overhead is allocated based
Premium Costs Revenue Cost
Managing Innovative Changes Introduction This paper is focused on the service innovation and management of innovative changes in present. Though‚ innovation is one of the most significant elements in the development of service science‚ but mostly considers as a little further to the repackaging of a existing theory and practice from a wide range of disciplines and cannot be considered as a new‚ emergent‚ business or management paradigm. This paper is written to give evidence from the management
Premium Service system Innovation
1. Use the data given to calculate annual returns for Goodman‚ Landry‚ and the Market Index‚ and then calculate average annual returns for the two stocks and the index. (Hint: Remember‚ returns are calculated by subtracting the beginning price from the ending price to get the capital gain or loss‚ adding the dividend to the capital gain or loss‚ and then dividing the result by the beginning price. Assume that dividends are already included in the index. Also‚ you cannot calculate the rate of return
Premium Standard deviation Rate of return Option
on the collaborative efforts from all the individuals in the team. The main objective is to get the departmental productivity increased to meet the organisations expectations. With this objective established the team is able to collaboratively develop action plans which attribute time frames‚ resources and personell to specific activities. To appropriately assign each team member their task so the goal can be achieved efficiently skills mapping is required. This is essential to designation of team
Premium Goal
cookware because of its good thermal conductivity. In Eastern and Western cooking traditions‚ copper cookware sets were popular because they provided the best conductivity‚ and therefore the most even heating and cooking. Copper pots and pans were a staple of the colonial kitchen and have withstood the test of time to remain popular in the professional and home kitchen alike. Copper cookware sets will typically include a saut� pan‚ frying pan and a sauce pan. These are essential items when high heat
Premium Iron Aluminium Steel
The Shampoo Data Set This data set is generated by a study of Brand X shampoo. It contains two measurements of customer satisfaction (on a scale from 0 to 100) with a shampoo sample. The customer satisfaction measurements were taken from 10 men and 10 women at two separate times. The first measurement is taken before the presentation of an advertising campaign‚ and the second measurement is taken after the campaign. The last column contains a dichotomous measure of purchase intentions. Each
Premium Harshad number Measurement Prime number
Maldonado January 21‚ 2015 Develop Goals EDA 577 Grand Canyon University Develop Goals As the course of weeks of planning have interpose realizing a campus improvement plan is an essential item for any growth of a learning environment. Modifying our processes‚ teaching practices and student learning is vital to notice in order to make our action plan become successful. We must not forget the fact that our action plan is intertwined with the vision and mission set up by the administration team
Premium Standardized test Psychometrics Educational years