with calculations and reason. Question 5.8You are considering three mutually exclusive projects with the followingcash flows:Projected Cash FlowsProbabilities Project A Project B Project C$200,000$50,000$68,000$70,000Investment required$100,000$30,000$40,000$50,000$150,000$40,000$55,000$67,0001.000.35Annual cash flows for 5уears0.450.20Compute the mean and variance of NPW distribution for each project using i = 12%. Assumethat project cash flows are mutually independent. Which project has a higher probability of losingmoney? You must calculate probabilities for each alternative. (Hint: use normal approximation)A) Project AB) Project BC) Project CD) Answers A, B and C are not correct

Answered: Image /qna-images/answer/e544b3f3-7046-453d-8add-5225597e612d.jpg

Answered: You are considering three mutually…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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Question 3 (Minimum-variance Hedging) A farmer has a crop of grapefruit juice that will be ready for harvest and sale as 150000 pounds of grapefruit juice in 3 months. He is worried about possible price changes, so he is considering hedging - a financial engineering technique that minimizes future uncertainties in the cash flow. Typically, hedging is carried out using futures contract. However, unfortunately, there is no futures contract for grapefruit juice, but there is a futures contract for orange juice. Still, the farmer might consider using the futures contract for orange juice as a replacement for futures contract for grapefruit juice, in the hope that these two contracts are highly correlated due to the similarity of the underlying products. Currently, the spot prices are $1.20 per pound for orange juice and $1.50 per pound for grapefruit juice. The standard deviation of the prices of orange juice and grapefruit juice is about 20% per year, and the correlation coefficient…
The following table reports a portion of the annual returns (in percent) for these two funds from 2000–2016. Data for Case Study 3.2 Returns (in percent) for Janus Funds Year Balanced Overseas 2000-2.16-18.57 2001-5.04-23.11 2002-6.56-23.89 2003-13.74-36.79 2004-8.71-18.58 2005-7.75-32.39 2006-10.56-47.21 2007-10.15-27.76 2008-15.22-52.75 2009-24.28-78.12 2010-7.83-19.28 2011-1.44-32.78 2012-13.07-12.42 2013-19.72-12.1 2014-8.46-13.72 2015-0.60-8.55 2016-4.51-6.91 In a report, use the sample information to 1. Calculate measures of central location to describe the similarities and the differences in these two funds’ returns. 2. Calculate measures of dispersion to assess the risk of each fund. 3. Calculate and interpret measures of correlation between the two funds.
Question 1A A CEO of a multihospital system is planning to expand operations into various states. It will take several years to get certificate of need (CON) approvals so that the new facilities can be constructed. The eventual cost (in millions of dollars) of building a facility will differ among states, depending upon finances, labor, and the economic and political climate. An outside consulting firm estimated the costs for the new facilities as based on declining, similar, or improving economies, and the associated probabilities as shown in the Table below. Decision alternatives Declining Same Improving Kentucky 22.00 19.00 15.00 Maryland 19.00 18.50 18.00 North carolina 19.50 17.00 15.50 Tennesee 23.00 17.00 14.00 Virginia 25.00 21.00 13.00 The first part should be done as cost and the second part should be done as profits. (a) Which alternative should the firm choose under the maximax criterion? (b) Which option…
QUESTION 6 The following is a payoff table giving profits for various situations. State 1 State 2 State 3 Probability 0.4 0.35 0.25 Alternative 1 45 37 83 Alternative 2 16 59 72 Alternative 3 23 65 91 Alternative 4 44 33 55 If a person were to use the expected monetary value criterion, what decision would be made? Alternative 1 Alternative 2 Alternative 3 Alternative 4
Consider the following payoff matrix.
Consider the following table containing yields for mutual funds in different asset classes (small, mid, and large cap). Fund Yield by Asset Class Small Cap Mid Cap Large Cap Fund Yield (%) Fund Yield (%) Fund Yield (%) Explorer Value 2.04 Capital Value 0.96 Equity Income 3.24 Small-Cap Value Index Admiral 2.46 Mid-Cap Value Index Admiral 1.57 High Dividend Yield Index 3.50 Small-Cap Index Admiral Shares 1.49 Extended Market Index Admiral Shares 1.22 500 Index Admiral Shares 1.57 Strategic Small-Cap Equity 0.38 Mid-Cap Index Admiral Shares 1.52 Diversified Equity 1.23 Explorer 0.17 Mid-Cap Growth 2.76 FTSE Social Index 1.42 Small-Cap Growth Index Admiral 0.21 Capital Value 0.32 Growth Equity 2.52 Explorer Value 2.55 Strategic Equity 1.54 U.S. Growth 0.37 Small-Cap ETF 1.44 Capital Opportunity Admiral Shares 2.14 Windsor 1.64 sum of squares for treatmentssum of squares for error≈1.5986≈18.4205 Step 2 of 2 : Find the mean square for treatments. Round…
Subject: Stochastic process Question 1 is attached to the image section below
] Consider the following table containing yields for mutual funds in different asset classes (small, mid, and large cap). Fund Yield by Asset Class Small Cap Mid Cap Large Cap Fund Yield (%) Fund Yield (%) Fund Yield (%) Explorer Value 1.22 Capital Value 0.96 Equity Income 3.24 Small-Cap Value Index Admiral 2.46 Mid-Cap Value Index Admiral 0.52 High Dividend Yield Index 3.50 Small-Cap Index Admiral Shares 1.49 Extended Market Index Admiral Shares 1.22 500 Index Admiral Shares 0.52 Strategic Small-Cap Equity 2.61 Mid-Cap Index Admiral Shares 1.52 Diversified Equity 1.23 Explorer 0.17 Mid-Cap Growth 0.82 FTSE Social Index 1.42 Small-Cap Growth Index Admiral 0.21 Capital Value 0.32 Growth Equity 1.42 Explorer Value 1.32 Strategic Equity 1.54 U.S. Growth 0.37 Small-Cap ETF 1.44 Capital Opportunity Admiral Shares 1.27 Windsor 1.64 sum of squares for treatmentssum of squares for error≈1.7894≈15.7229 Step 1 of 2 : What are the degrees of freedom…
QUESTION 3 A researcher wants to understand how an annual mortgage payment (in Ringgit) depends on income level and zonal location allowing for an interaction. The data are shown below. LOW MEDIUM HIGH KOTA KINABALU 75 165 180 120 180 195 66 15 189 90 300 180 SANDAKAN 210 225 300 255 150 345 222 162 324 300 135 480 TAWAU 225 225 225 165 210 180 123 165 237 120 210 195 LAHAD DATU 15 120 177 30 75 90 30 120 135 45 105 120 KENINGAU 5 40 59 10 25 30 10 40 45 15 35 40 a. Construct a two-way (with interaction) ANOVA table for these data. b. At the 5% significance level, can you conclude there is interaction between income and zonal location?
Question 4 A country club wants to exam the effects of a new marketing campaign that attempts to get more people within the community to become members. In many communities, when people buy a house in the area, they receive a “Welcome Wagon” gift basket containing coupons to local restaurants. The idea of the marketing campaign is to include a free two month membership to the country club in the gift basket with the hope that once “new” residents try the country club then at least a certain proportion will want to become real members. One member of the Club’s Executive Council believes that at least 25% of the people who receive the coupons for the free membership will use the coupon. When testing the hypothesis that at least 25% of the people who receive the coupons for the free membership will use the coupon, what is the null and alternative hypothesis?
Question 3 The Bank of Canada is interested in studying the relationship between mortgage rates and median home prices. The data is provided below Year Interst rate Median home price 1988 10.30 183,800 1989 10.30 183,200 1990 10.10 174,900 1991 9.30 173,500 1992 8.40 172,900 1993 7.30 173,200 1994 8.40 173,200 1995 7.90 169,700 1996 7.60 174,500 1997 7.60 177,900 1998 6.90 188,100 1999 7.40 203,200 2000 8.10 230,200 2001 7.00 258,200 2002 6.50 309,800 2003 5.80 329,800 2004 5.80 431,000 2005 5.80 515,000 2006 6.40 537,000 2007 6.30 496,000 2008 6.00 352,000 2009 5.00 232,000 2010 4.70 291,700 2011 4.40 262,900 2012 3.60 299,200 2013 4.00 321,200 2014 4.10 373,500 2015 3.80 358,100 2016 3.60 382,500 2017 4.00 402,900 a) Estimate a…
QUESTION 5 A country club wants to exam the effects of a new marketing campaign that attempts to get more people within the community to become members. In many communities, when people buy a house in the area, they receive a “Welcome Wagon” gift basket containing coupons to local restaurants. The idea of the marketing campaign is to include a free two month membership to the country club in the gift basket with the hope that once “new” residents try the country club then at least a certain proportion will want to become real members. One member of the Club’s Executive Council believes that at least 80% of the people who receive the coupons for the free membership will use the coupon. In a sample of 197 new residents who received the coupon for the two month free membership, there were 136 people who actually took advantage of the free two month membership. When testing the hypothesis that at least 80% of the people that receive the coupon actually use it, what is the test statistic?…

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