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:
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OPIM Assignment 4 1. Cu = 24-11 = $13 Co = 11-7 = $4 Critical ratio = 13/(13+4) = 0.7647 μ = 30‚000 σ = 10‚000 Using normal distribution function (=norminv(0.7647‚30000‚10000))‚ the optimum order quantity is 37‚216 jerseys to maximize profit. 2. Quantity = 32‚000 First‚ we normalize the order quantity to find the z-statistic z=Q-μσ=32‚000-25‚00010‚000=0.7 We then look up the standard normal loss function. The expected lost sale is given by. Lz=0.1429 Therefore‚ the expected lost
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| |The Garden Depot | |Customer Dissatisfaction Analysis | | Executive Summary Overview The Garden Depot (The Depot)‚ a large retail store specializing in the garden
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Week 4 Homework Solutions: Problem Set 4 1. Determining Profit or Loss from an Investment. Three years ago‚ you purchased 150 shares of IBM stock for $88 a share. Today‚ you sold your IBM stock for $103 a share. For this problem‚ ignore commissions that would be charged to buy and sell your IBM shares. a. What is the amount of profit you earned on each share of IBM stock? The profit on each share of IBM stock was $15. $103 priced when each share was sold‚ $88 priced when each
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Home Depot- Análisis de Estructura de Capital La historia de Home Depot empezó con una visión de tiendas-almacén llenas hasta el techo con una amplia variedad de productos‚ a los precios más bajos‚ con asociados diestros ofreciendo el mejor servicio al cliente en la industria. Actualmente es el detallista de mejoras al hogar más grande del mundo y el segundo detallista más grande de Estados Unidos. Ha sido reconocido #1 por la revista Fortune como el Detallista Especializado más Admirado en el 2005
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Problem Statement - A farmer was taking her eggs to the market in her cart‚ and when she was heading there‚ she hit a pothole and all her eggs flew out of the cart and now all of them are broken. She then goes to her insurance agent‚ who asked her how many eggs she had when she hit the pothole. She didn’t remember how much eggs she had but she does remember some things from various ways she tried packing the eggs. She knows that when she put the eggs in groups of 2‚ there was one egg left over. When
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Marketing Case: Office depot The case that we are going to talk about today is about how office depot manages customer care & services. In the article we had to read they took an example of a couple‚ Steve and Dana. Dana experienced a dreadful delivery and therefore Steve‚ a marketing professor who heard the story from Dana and had just done a presentation about how important customer service is‚ decided to phone office depots customer service to see how they would handle his complaint. Steve had
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Microeconomics (Fall 2014) Simon Bowmaker Problem Set 6 Submit at lecture (Monday‚ November 10) Write your answers on separate sheets of paper. Please include: your name your recitation teacher’s name day and time of the recitation NB: if your recitation takes place on Monday morning‚ you must submit your assignment to your teacher at the beginning of the recitation. 1. Assume a monopolist faces the following market demand: Q = 100 - 2P. The monopolist’s total cost function is TC = 5+8Q2. What
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FIN532M: Financial Derivatives Problem Set 2 DUE DATE: Feb. 12‚ 2015 1. How can you differentiate the forward price from the value of a forward contract? (2 points) 2. Explain why an FRA can be viewed as an exchange of a floating rate of interest for a fixed rate of interest payments and how you can use FRA in mitigating risks. (4 points) 3. The standard deviation of monthly changes in the spot price of live cattle is 1.2 cents per pound. The standard deviation of monthly changes in the futures
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| [Comprehensive business Analysis: Office Depot] | Background Office Depot was founded in 1986 by F. Patrick Sher‚ Stephen Dougherty and Jack Kopkin in Boca Raton‚ Florida. The three envisioned a warehouse style store that could offer office supplies at discounted prices. The first store was opened in October in Fort Lauderdale. It was immediately successful and before the year was over‚ two more stores were opened in Florida. While Office Depot was one of the first companies to tap into
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