70)2. Artie Siegel, an MBA student, has been having problems balancing his checkbook. His monthly income is derived from a graduate research assistantship; however, he also makes extra money in most months by tutoring undergraduates in their quantitative analysis course. His historical chances of various income levels are shown in the following table: Monthly Income* ($) Probability 350 0.40 400 0.20 450 0.30 500 0.10 *Assume that this income is received at the beginning of each month. Siegel’s expenditures also vary from month to month, and he estimates that they will follow this distribution: Monthly Expenses ($) Probability 300 0.10 400 0.45 500 0.30 600 0.15 He begins his final year with $600 in his checking account. Simulate the entire year (12 months) on the next page and discuss Siegel’s financial picture, i.e., will he be able to keep his head above water--(out of debt)? What is his expected average profit for the 12 months? Use the random numbers below. Random numbers for Income and Expenses Income 85 54 73 95 9 19 81 2 76 55 57 1 Expenses 99 44 1 80 95 72 75 16 32 57 31 32
70)2. Artie Siegel, an MBA student, has been having problems balancing his checkbook. His
monthly income is derived from a graduate research assistantship; however, he also makes extra
money in most months by tutoring undergraduates in their quantitative analysis course. His
historical chances of various income levels are shown in the following table:
Monthly Income* ($) Probability
350 0.40
400 0.20
450 0.30
500 0.10
*Assume that this income is received at the beginning of each month.
Siegel’s expenditures also vary from month to month, and he estimates that they will follow this
distribution:
Monthly Expenses ($) Probability
300 0.10
400 0.45
500 0.30
600 0.15
He begins his final year with $600 in his checking account. Simulate the entire year (12 months)
on the next page and discuss Siegel’s financial picture, i.e., will he be able to keep his head
above water--(out of debt)? What is his expected average profit for the 12 months? Use the
random numbers below.
Random numbers for Income and Expenses
Income 85 54 73 95 9 19 81 2 76 55 57 1
Expenses 99 44 1 80 95 72 75 16 32 57 31 32
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