Mathematics with Applications In the Management, Natural and Social Sciences (11th Edition)
11th Edition
ISBN: 9780321931078
Author: Margaret L. Lial, Thomas W. Hungerford, John P. Holcomb, Bernadette Mullins
Publisher: PEARSON
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Chapter 6.5, Problem 4E
To determine
To calculate: The size of the product of the matrix,
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4. Assume that a risk-free money market account is added to the market described in Q3.
The continuously compounded rate of return on the money market account is log (1.1).
(i) For each given μ, use Lagrange multipliers to determine the proportions (as a
function of μ) of wealth invested in the three assets available for the minimum
variance portfolio with expected return μ.
(ii) Determine the market portfolio in this market and calculate its Sharp ratio.
3. A market consists of two risky assets with rates of return R₁ and R2 and no risk-free
asset. From market data the following have been estimated: ER₁ = 0.25, ER2 = 0.05,
Var R₁ = 0.01, Var R2 = 0.04 and the correlation between R1 and R2 is p = -0.75.
(i) Given that an investor is targeting a total expected return of μ = 0.2. What
portfolio weights should they choose to meet this goal with minimum portfolio
variance? Correct all your calculations up to 4 decimal points.
(ii) Determine the global minimum-variance portfolio and the expected return and
variance of return of this portfolio (4 d.p.).
(iii) Sketch the minimum-variance frontier in the μ-σ² plane and indicate the efficient
frontier.
(iv) Without further calculation, explain how the minimum variance of the investor's
portfolio return will change if the two risky assets were independent.
2. A landlord is about to write a rental contract for a tenant which lasts T months. The
landlord first decides the length T > 0 (need not be an integer) of the contract, the
tenant then signs it and pays an initial handling fee of £100 before moving in. The
landlord collects the total amount of rent erT at the end of the contract at a continuously
compounded rate r> 0, but the contract stipulates that the tenant may leave before T,
in which case the landlord only collects the total rent up until the tenant's departure
time 7. Assume that 7 is exponentially distributed with rate > 0, λ‡r.
(i) Calculate the expected total payment EW the landlord will receive in terms of T.
(ii) Assume that the landlord has logarithmic utility U(w) = log(w - 100) and decides
that the rental rate r should depend on the contract length T by
r(T)
=
λ
√T
1
For each given λ, what T (as a function of X) should the landlord choose so as to
maximise their expected utility? Justify your answer.
Hint. It might be…
Chapter 6 Solutions
Mathematics with Applications In the Management, Natural and Social Sciences (11th Edition)
Ch. 6.1 - Checkpoint1 Use the substitution method tosolve...Ch. 6.1 - Checkpoint 2
Use the elimination method to solve...Ch. 6.1 - Checkpoint 3
Solve the system of equations .
Draw...Ch. 6.1 - Checkpoint 4
Solve the following system:
Ch. 6.1 - Checkpoint 5
Solve the system
Draw the graph of...Ch. 6.1 - Prob. 6CPCh. 6.1 - Prob. 1ECh. 6.1 - Prob. 2ECh. 6.1 - Use substitution to solve each system. (See...Ch. 6.1 - Use substitution to solve each system. (See...
Ch. 6.1 - Use substitution to solve each system. (See...Ch. 6.1 - Use substitution to solve each system. (See...Ch. 6.1 - Use elimination to solve each system. (See...Ch. 6.1 - Use elimination to solve each system. (See...Ch. 6.1 - Use elimination to solve each system. (See...Ch. 6.1 - Use elimination to solve each system. (See...Ch. 6.1 - Use elimination to solve each system. (See...Ch. 6.1 - Prob. 12ECh. 6.1 - Prob. 13ECh. 6.1 - Use elimination to solve each system. (See...Ch. 6.1 - Use elimination to solve each system. (See...Ch. 6.1 - Prob. 16ECh. 6.1 - In Exercises 17 and 18, multiply both sides of...Ch. 6.1 - In Exercises 17 and 18, multiply both sides of...Ch. 6.1 - 19. Business When Neil Simon opened a new play, he...Ch. 6.1 - Prob. 20ECh. 6.1 - 21. Social Science According to U.S. Census Bureau...Ch. 6.1 - 22. Social Science The population y of the given...Ch. 6.1 - Prob. 23ECh. 6.1 - 24. Health The number of deaths y in year x can be...Ch. 6.1 - 25. Business A 200-seat theater charges $8 for...Ch. 6.1 - 26. Business In November 2008, HBO released the...Ch. 6.1 - 27. Physical Science A plane flies 3000 miles from...Ch. 6.1 - 28. Physical Science A plane flying into a...Ch. 6.1 - 29. Finance Shirley Cicero has $16,000 invested in...Ch. 6.1 - 30. Business An apparel shop sells skirts for $45...Ch. 6.1 - Prob. 31ECh. 6.1 - Prob. 32ECh. 6.2 - Checkpoint 1
Use the elimination method to solve...Ch. 6.2 - Prob. 2CPCh. 6.2 - Prob. 3CPCh. 6.2 - Prob. 4CPCh. 6.2 - Prob. 5CPCh. 6.2 - Prob. 6CPCh. 6.2 - Prob. 7CPCh. 6.2 - Checkpoint 8
Solve each system.
(a)
(b)
Ch. 6.2 - Prob. 9CPCh. 6.2 - Prob. 1ECh. 6.2 - Prob. 2ECh. 6.2 - Prob. 3ECh. 6.2 - Prob. 4ECh. 6.2 - Prob. 5ECh. 6.2 - Prob. 6ECh. 6.2 - Obtain an equivalent system by performing the...Ch. 6.2 - Obtain an equivalent system by performing the...Ch. 6.2 - Obtain an equivalent system by performing the...Ch. 6.2 - Prob. 10ECh. 6.2 - Prob. 11ECh. 6.2 - Obtain an equivalent system by performing the...Ch. 6.2 - Prob. 13ECh. 6.2 - Write the augmented matrix of each of the given...Ch. 6.2 - Prob. 15ECh. 6.2 - Prob. 16ECh. 6.2 - Prob. 17ECh. 6.2 - Prob. 18ECh. 6.2 - Prob. 19ECh. 6.2 - Use the indicated row operation to transform each...Ch. 6.2 - In Exercises 21-24, the reduced row echelon form...Ch. 6.2 - In Exercises 21-24, the reduced row echelon form...Ch. 6.2 - In Exercises 21-24, the reduced row echelon form...Ch. 6.2 - In Exercises 21-24, the reduced row echelon form...Ch. 6.2 - In Exercises 25-30, perform row operations on the...Ch. 6.2 - In Exercises 25-30, perform row operations on the...Ch. 6.2 - In Exercises 25-30, perform row operations on the...Ch. 6.2 - Prob. 28ECh. 6.2 - Prob. 29ECh. 6.2 - Prob. 30ECh. 6.2 - Write the augmented matrix of the system and use...Ch. 6.2 - Write the augmented matrix of the system and use...Ch. 6.2 - Write the augmented matrix of the system and use...Ch. 6.2 - Write the augmented matrix of the system and use...Ch. 6.2 - Write the augmented matrix of the system and use...Ch. 6.2 - Prob. 36ECh. 6.2 - Prob. 37ECh. 6.2 - Write the augmented matrix of the system and use...Ch. 6.2 - Use the Gauss-Jordan method to solve each of the...Ch. 6.2 - Prob. 40ECh. 6.2 - Prob. 41ECh. 6.2 - Prob. 42ECh. 6.2 - Prob. 43ECh. 6.2 - Prob. 44ECh. 6.2 - Prob. 45ECh. 6.2 - Prob. 46ECh. 6.2 - Prob. 47ECh. 6.2 - Prob. 48ECh. 6.2 - Prob. 49ECh. 6.2 - Solve the system by any method.
50.
Ch. 6.2 - Prob. 51ECh. 6.2 - Prob. 52ECh. 6.2 - Prob. 53ECh. 6.2 - Prob. 54ECh. 6.2 - Prob. 55ECh. 6.2 - Prob. 56ECh. 6.2 - Prob. 57ECh. 6.2 - Prob. 58ECh. 6.2 - Prob. 59ECh. 6.2 - Prob. 60ECh. 6.2 - Prob. 61ECh. 6.2 - Solve the system by any method.
62.
Ch. 6.2 - Prob. 63ECh. 6.2 - Prob. 64ECh. 6.2 - Prob. 65ECh. 6.2 - Prob. 66ECh. 6.2 - Prob. 67ECh. 6.2 - Prob. 68ECh. 6.2 - Prob. 69ECh. 6.2 - Prob. 70ECh. 6.2 - Prob. 71ECh. 6.2 - 72. Explain why a system with more variables than...Ch. 6.3 - Prob. 1CPCh. 6.3 - Prob. 2CPCh. 6.3 - Checkpoint 3
(a) Write the augmented matrix of...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Prob. 5ECh. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - Use systems of equations to work these applied...Ch. 6.3 - A graphing calculator or other technology is...Ch. 6.3 - A graphing calculator or other technology is...Ch. 6.3 - A graphing calculator or other technology is...Ch. 6.3 - A graphing calculator or other technology is...Ch. 6.3 - 25. Social Science The table shows Census Bureau...Ch. 6.3 - 26. Social Science The table shows Census Bureau...Ch. 6.3 - 27. Business At a pottery factory, fuel...Ch. 6.3 - Prob. 28ECh. 6.3 - Prob. 29ECh. 6.3 - Prob. 30ECh. 6.4 - Checkpoint 1
Rewrite matrix M in Example 1 in a...Ch. 6.4 - Prob. 2CPCh. 6.4 - Prob. 3CPCh. 6.4 - Prob. 4CPCh. 6.4 - Prob. 5CPCh. 6.4 - Prob. 6CPCh. 6.4 - Prob. 7CPCh. 6.4 - Prob. 8CPCh. 6.4 - Prob. 9CPCh. 6.4 - Prob. 1ECh. 6.4 - Prob. 2ECh. 6.4 - Prob. 3ECh. 6.4 - Prob. 4ECh. 6.4 - Prob. 5ECh. 6.4 - Prob. 6ECh. 6.4 - Prob. 7ECh. 6.4 - Find the size of each of the given matrices....Ch. 6.4 - Prob. 9ECh. 6.4 - Perform the indicated operations where possible....Ch. 6.4 - Prob. 11ECh. 6.4 - Perform the indicated operations where possible....Ch. 6.4 - Prob. 13ECh. 6.4 - Perform the indicated operations where possible....Ch. 6.4 - Prob. 15ECh. 6.4 - Prob. 16ECh. 6.4 - Prob. 17ECh. 6.4 - Let and . Find each of the following. (See...Ch. 6.4 - Prob. 19ECh. 6.4 - Let and . Find each of the following. (See...Ch. 6.4 - Prob. 21ECh. 6.4 - Let and . Find each of the following. (See...Ch. 6.4 - Prob. 23ECh. 6.4 - Prob. 24ECh. 6.4 - Prob. 25ECh. 6.4 - Prob. 26ECh. 6.4 - Prob. 27ECh. 6.4 - Using matrices
verify that the statements in...Ch. 6.4 - Prob. 29ECh. 6.4 - Prob. 30ECh. 6.4 - Work the following exercises. (See Example...Ch. 6.4 - Work the following exercises. (See Example...Ch. 6.4 - Prob. 33ECh. 6.4 - Prob. 34ECh. 6.4 - Prob. 35ECh. 6.4 - 36. Social Science The following table gives...Ch. 6.4 - 37. Social Science The tables give the death rates...Ch. 6.4 - Prob. 38ECh. 6.5 - Prob. 1CPCh. 6.5 - Prob. 2CPCh. 6.5 - Prob. 3CPCh. 6.5 - Prob. 4CPCh. 6.5 - Prob. 5CPCh. 6.5 - Prob. 6CPCh. 6.5 - Prob. 7CPCh. 6.5 - Prob. 8CPCh. 6.5 - Prob. 9CPCh. 6.5 - Prob. 1ECh. 6.5 - Prob. 2ECh. 6.5 - In Exercises 1-6, the sizes of two matrices A and...Ch. 6.5 - In Exercises 1-6, the sizes of two matrices A and...Ch. 6.5 - Prob. 5ECh. 6.5 - Prob. 6ECh. 6.5 - Prob. 7ECh. 6.5 - Prob. 8ECh. 6.5 - Prob. 9ECh. 6.5 - Prob. 10ECh. 6.5 - Find each of the following matrix products, if...Ch. 6.5 - Prob. 12ECh. 6.5 - Prob. 13ECh. 6.5 - Find each of the following matrix products, if...Ch. 6.5 - Prob. 15ECh. 6.5 - Prob. 16ECh. 6.5 - Prob. 17ECh. 6.5 - Find each of the following matrix products, if...Ch. 6.5 - Prob. 19ECh. 6.5 - Prob. 20ECh. 6.5 - Prob. 21ECh. 6.5 - Prob. 22ECh. 6.5 - Prob. 23ECh. 6.5 - Given matrices
verify that the statements in...Ch. 6.5 - Prob. 25ECh. 6.5 - Prob. 26ECh. 6.5 - Prob. 27ECh. 6.5 - Prob. 28ECh. 6.5 - Prob. 29ECh. 6.5 - Prob. 30ECh. 6.5 - Prob. 31ECh. 6.5 - Determine whether the given matrices are inverses...Ch. 6.5 - Prob. 33ECh. 6.5 - Prob. 34ECh. 6.5 - Prob. 35ECh. 6.5 - Find the inverse, if it exists, for each of the...Ch. 6.5 - Prob. 37ECh. 6.5 - Find the inverse, if it exists, for each of the...Ch. 6.5 - Prob. 39ECh. 6.5 - Prob. 40ECh. 6.5 - Find the inverse, if it exists, for each of the...Ch. 6.5 - Find the inverse, if it exists, for each of the...Ch. 6.5 - Prob. 43ECh. 6.5 - Prob. 44ECh. 6.5 - Prob. 45ECh. 6.5 - Prob. 46ECh. 6.5 - Prob. 47ECh. 6.5 - Prob. 48ECh. 6.5 - Prob. 49ECh. 6.5 - A graphing calculator or other technology is...Ch. 6.5 - Prob. 51ECh. 6.5 - Prob. 52ECh. 6.5 - Prob. 53ECh. 6.5 - Prob. 54ECh. 6.5 - Prob. 55ECh. 6.5 - Prob. 56ECh. 6.6 - Prob. 1CPCh. 6.6 - Prob. 2CPCh. 6.6 - Prob. 3CPCh. 6.6 - Prob. 4CPCh. 6.6 - Prob. 5CPCh. 6.6 - Prob. 6CPCh. 6.6 - Prob. 7CPCh. 6.6 - Checkpoint 8
Use the following matrix to find the ...Ch. 6.6 - Prob. 9CPCh. 6.6 - Prob. 1ECh. 6.6 - Prob. 2ECh. 6.6 - Prob. 3ECh. 6.6 - Prob. 4ECh. 6.6 - Prob. 5ECh. 6.6 - Prob. 6ECh. 6.6 - Prob. 7ECh. 6.6 - Use the inverse of the coefficient matrix to solve...Ch. 6.6 - Prob. 9ECh. 6.6 - Prob. 10ECh. 6.6 - Prob. 11ECh. 6.6 - Use the inverse of the coefficient matrix to solve...Ch. 6.6 - Prob. 13ECh. 6.6 - Prob. 14ECh. 6.6 - Prob. 15ECh. 6.6 - Prob. 16ECh. 6.6 - 17. Business Donovan’s Dandy Furniture makes...Ch. 6.6 - Prob. 18ECh. 6.6 - Prob. 19ECh. 6.6 - Prob. 20ECh. 6.6 - Prob. 21ECh. 6.6 - 22. Health A 100-bed nursing home provides two...Ch. 6.6 - Find the production matrix for the given...Ch. 6.6 - Prob. 24ECh. 6.6 - Prob. 25ECh. 6.6 - Exercises 25 and 26 refer to Example 6.
Example 6...Ch. 6.6 - Prob. 27ECh. 6.6 - Work these problems. (See Examples 3-6.)
28....Ch. 6.6 - Prob. 29ECh. 6.6 - Prob. 30ECh. 6.6 - Prob. 31ECh. 6.6 - Prob. 32ECh. 6.6 - Prob. 33ECh. 6.6 - Prob. 34ECh. 6.6 - Prob. 35ECh. 6.6 - Prob. 36ECh. 6.6 - Prob. 37ECh. 6.6 - Prob. 38ECh. 6.6 - Prob. 39ECh. 6.6 - Prob. 40ECh. 6.6 - Prob. 41ECh. 6.6 - Prob. 42ECh. 6.6 - Prob. 43ECh. 6.6 - 44. Business The figure shows four southern cities...Ch. 6.6 - Prob. 45ECh. 6 - Prob. 1CECh. 6 - 2. It was shown previously that there are four...Ch. 6 - 3. Which trips in the Stampede Air network take...Ch. 6 - Prob. 4CECh. 6 - Prob. 5CECh. 6 - Prob. 6CECh. 6 - Prob. 1RECh. 6 - Solve each of the following systems.
2.
Ch. 6 - Solve each of the following systems.
3.
Ch. 6 - Solve each of the following systems.
4.
Ch. 6 - 5. Business Abigail Henderson plans to buy shares...Ch. 6 - Prob. 6RECh. 6 - Prob. 7RECh. 6 - Prob. 8RECh. 6 - Prob. 9RECh. 6 - Prob. 10RECh. 6 - Prob. 11RECh. 6 - Prob. 12RECh. 6 - Prob. 13RECh. 6 - Prob. 14RECh. 6 - Prob. 15RECh. 6 - Prob. 16RECh. 6 - Prob. 17RECh. 6 - Prob. 18RECh. 6 - Prob. 19RECh. 6 - Prob. 20RECh. 6 - Prob. 21RECh. 6 - Prob. 22RECh. 6 - Prob. 23RECh. 6 - Prob. 24RECh. 6 - Prob. 25RECh. 6 - Prob. 26RECh. 6 - Prob. 27RECh. 6 - Prob. 28RECh. 6 - Prob. 29RECh. 6 - Prob. 30RECh. 6 - Prob. 31RECh. 6 - Prob. 32RECh. 6 - Prob. 33RECh. 6 - Prob. 34RECh. 6 - Prob. 35RECh. 6 - Prob. 36RECh. 6 - Prob. 37RECh. 6 - Prob. 38RECh. 6 - Prob. 39RECh. 6 - Prob. 40RECh. 6 - Prob. 41RECh. 6 - Prob. 42RECh. 6 - Prob. 43RECh. 6 - Prob. 44RECh. 6 - Prob. 45RECh. 6 - Prob. 46RECh. 6 - Prob. 47RECh. 6 - Prob. 48RECh. 6 - Prob. 49RECh. 6 - Prob. 50RECh. 6 - Prob. 51RECh. 6 - Prob. 52RECh. 6 - Prob. 53RECh. 6 - Prob. 54RECh. 6 - Prob. 55RECh. 6 - Prob. 56RECh. 6 - Prob. 57RECh. 6 - Prob. 58RECh. 6 - Prob. 59RECh. 6 - Prob. 60RECh. 6 - Prob. 61RECh. 6 - Prob. 62RECh. 6 - Prob. 63RECh. 6 - Prob. 64RECh. 6 - Prob. 65RECh. 6 - Prob. 66RECh. 6 - Prob. 67RECh. 6 - Prob. 68RECh. 6 - Prob. 69RECh. 6 - Prob. 70RECh. 6 - Prob. 71RECh. 6 - Prob. 72RECh. 6 - Prob. 73RECh. 6 - Prob. 74RECh. 6 - Prob. 75RECh. 6 - Prob. 76RECh. 6 - Prob. 77RECh. 6 - Prob. 78RECh. 6 - Prob. 79RECh. 6 - Prob. 80RECh. 6 - Prob. 81RECh. 6 - Prob. 82RECh. 6 - Prob. 83RECh. 6 - Prob. 84RECh. 6 - Prob. 85RECh. 6 - Solve each of the following problems by any...Ch. 6 - Prob. 87RECh. 6 - Prob. 88RECh. 6 - Prob. 89RECh. 6 - Use technology to do Exercises 89-91.
90. Business...Ch. 6 - Prob. 91RECh. 6 - Prob. 92RECh. 6 - Prob. 93RECh. 6 - Prob. 94RE
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- Please solving problem2 Problem1 We consider a two-period binomial model with the following properties: each period lastsone (1) year and the current stock price is S0 = 4. On each period, the stock price doubleswhen it moves up and is reduced by half when it moves down. The annual interest rateon the money market is 25%. (This model is the same as in Prob. 1 of HW#2).We consider four options on this market: A European call option with maturity T = 2 years and strike price K = 5; A European put option with maturity T = 2 years and strike price K = 5; An American call option with maturity T = 2 years and strike price K = 5; An American put option with maturity T = 2 years and strike price K = 5.(a) Find the price at time 0 of both European options.(b) Find the price at time 0 of both American options. Compare your results with (a)and comment.(c) For each of the American options, describe the optimal exercising strategy.arrow_forwardPlease ensure that all parts of the question are answered thoroughly and clearly. Include a diagram to help explain answers. Make sure the explanation is easy to follow. Would appreciate work done written on paper. Thank you.arrow_forwardThis question builds on an earlier problem. The randomized numbers may have changed, but have your work for the previous problem available to help with this one. A 4-centimeter rod is attached at one end to a point A rotating counterclockwise on a wheel of radius 2 cm. The other end B is free to move back and forth along a horizontal bar that goes through the center of the wheel. At time t=0 the rod is situated as in the diagram at the left below. The wheel rotates counterclockwise at 1.5 rev/sec. At some point, the rod will be tangent to the circle as shown in the third picture. A B A B at some instant, the piston will be tangent to the circle (a) Express the x and y coordinates of point A as functions of t: x= 2 cos(3πt) and y= 2 sin(3t) (b) Write a formula for the slope of the tangent line to the circle at the point A at time t seconds: -cot(3πt) sin(3лt) (c) Express the x-coordinate of the right end of the rod at point B as a function of t: 2 cos(3πt) +411- 4 -2 sin (3лt) (d)…arrow_forward
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ISBN:9780134392790
Author:Beckmann, Sybilla
Publisher:PEARSON
Thinking Mathematically (7th Edition)
Math
ISBN:9780134683713
Author:Robert F. Blitzer
Publisher:PEARSON
Discrete Mathematics With Applications
Math
ISBN:9781337694193
Author:EPP, Susanna S.
Publisher:Cengage Learning,
Pathways To Math Literacy (looseleaf)
Math
ISBN:9781259985607
Author:David Sobecki Professor, Brian A. Mercer
Publisher:McGraw-Hill Education
Finite Math: Markov Chain Example - The Gambler's Ruin; Author: Brandon Foltz;https://www.youtube.com/watch?v=afIhgiHVnj0;License: Standard YouTube License, CC-BY
Introduction: MARKOV PROCESS And MARKOV CHAINS // Short Lecture // Linear Algebra; Author: AfterMath;https://www.youtube.com/watch?v=qK-PUTuUSpw;License: Standard Youtube License
Stochastic process and Markov Chain Model | Transition Probability Matrix (TPM); Author: Dr. Harish Garg;https://www.youtube.com/watch?v=sb4jo4P4ZLI;License: Standard YouTube License, CC-BY