Calculus for Business, Economics, Life Sciences, and Social Sciences - Boston U.
15th Edition
ISBN: 9781323047620
Author: Barnett, Ziegler, Byleen
Publisher: Pearson Education
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Chapter B.4, Problem 51E
Voter registration. The number N of registered voters in a precinct over a 30-year period is given in the table.
(A) Find the interpolating polynomial for this table.
(B) Use the interpolating polynomial to approximate (to the nearest thousand) the average number of voters over the first 20 years of this period.
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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
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landlord collects the total amount of rent erT at the end of the contract at a continuously
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(i) Calculate the expected total payment EW the landlord will receive in terms of T.
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r(T)
=
λ
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1
For each given λ, what T (as a function of X) should the landlord choose so as to
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Hint. It might be…
Chapter B.4 Solutions
Calculus for Business, Economics, Life Sciences, and Social Sciences - Boston U.
Ch. B.4 - Consider the points in Table 1. (A)Let...Ch. B.4 - Given the following polynomial and table,...Ch. B.4 - Prob. 1MPCh. B.4 - Prob. 2MPCh. B.4 - Prob. 3MPCh. B.4 - Prob. 4MPCh. B.4 - Prob. 1ECh. B.4 - Prob. 2ECh. B.4 - Prob. 3ECh. B.4 - Prob. 4E
Ch. B.4 - Prob. 5ECh. B.4 - Prob. 6ECh. B.4 - Prob. 7ECh. B.4 - Prob. 8ECh. B.4 - Prob. 9ECh. B.4 - Prob. 10ECh. B.4 - Prob. 11ECh. B.4 - Prob. 12ECh. B.4 - Prob. 13ECh. B.4 - In Problems 1320, use the interpolating polynomial...Ch. B.4 - Prob. 15ECh. B.4 - Prob. 16ECh. B.4 - Prob. 17ECh. B.4 - Prob. 18ECh. B.4 - Prob. 19ECh. B.4 - Prob. 20ECh. B.4 - Prob. 21ECh. B.4 - Prob. 22ECh. B.4 - In Problems 2130, find the interpolating...Ch. B.4 - Prob. 24ECh. B.4 - Prob. 25ECh. B.4 - Prob. 26ECh. B.4 - Prob. 27ECh. B.4 - Prob. 28ECh. B.4 - Prob. 29ECh. B.4 - Prob. 30ECh. B.4 - Prob. 31ECh. B.4 - Prob. 32ECh. B.4 - Prob. 33ECh. B.4 - Prob. 34ECh. B.4 - The following table was obtained from the function...Ch. B.4 - Prob. 36ECh. B.4 - Prob. 37ECh. B.4 - The following table was obtained from the function...Ch. B.4 - Prob. 39ECh. B.4 - Prob. 40ECh. B.4 - Prob. 41ECh. B.4 - Prob. 42ECh. B.4 - Prob. 43ECh. B.4 - Prob. 44ECh. B.4 - Maximum revenue. The revenue R (in thousands of...Ch. B.4 - Minimum overage cost. The cost C (in thousands of...Ch. B.4 - Prob. 47ECh. B.4 - Prob. 48ECh. B.4 - Prob. 49ECh. B.4 - Prob. 50ECh. B.4 - Voter registration. The number N of registered...Ch. B.4 - Voter registration. The number N of registered...
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