Assignment 4 Answer Key
Ch10
U6. (a) 1There are two ways to find the PPierce that maximizes YPierce for each PDonna. Method 1:
multiply out and rearrange terms on the right-hand side of the expression for YPierce:
2
YPierce 3(12 0.5PDonna ) (3 12 0.5PDonn
Econ 490 Game Theory
Homework 2
Due: Feb 20 (Turn in at the beginning of class)
Printed Name:
UIN:
1. (30 points) (Textbook p.57, Ex.2.1) Two airlines, Airgo and Flyme, compete against each other on the
route between Cleveland and Minneapolis. Each day th
Econ 490 Game Theory
Spring 2016 Midterm
1. (20 points) In the following game:
(a) List out all the pure strategies for each player. (10 points)
(b) Identify the rollback equilibrium outcome and write down the complete
equilibrium strategy for each player
Intro
The recession which hit the United States during 2007-09 and beyond
and the world economy was extraordinary.
Often a parallel is drawn between this recession and the Great
Depression.
It was marked particularly by its deep and lingering impact on th
E490: Financial Economics Mid-Term 2 Review
Spring 2016
Satya P. Das
March 30, 2016
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E490: Financial Economics Mid-Term 2 Review Spring 2016
1 / 16
These slides are NOT a substitute for slides or
material discussed in class.
They provide outli
Pricing of Forward and Future Contracts
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Pricing of Forward and Future Contracts
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Forward Price Determination
Let at time or day 0, a forward market for an underlying asset, e.g. a
stock or currency, with maturity date T beg
Efficient Market Hypothesis
Satya P. Das
April 6, 2016
Satya P. Das
Efficient Market Hypothesis
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Introduction
In late 40s and 50s, there were attempts to collect time series data on
macro variables for the sake of patterns: how present values depend
E490: Financial Economics Mid-Term 1 Review
Spring 2016
Satya P. Das
February 17, 2016
E490: Financial Economics Mid-Term 1 Review Spring 2016
Satya P. Das
1 / 26
These slides are NOT a substitute for slides or
material discussed in class.
They provide ou
Overview of Financial System
Satya P. Das
January 26, 2016
Overview of Financial System
Satya P. Das
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Financial System: Six Parts
1
Money
I
2
Financial Instruments
I
I
I
3
It pays for our purchases and acts as store of value.
Refers to stocks, mortg
Instruments, Financial Markets: A Review
Satya P. Das
February 8, 2016
Instruments, Financial Markets: A Review
Satya P. Das
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Money Market
Instruments, Financial Markets: A Review
Satya P. Das
2 / 115
Intro
Money market does not deal with trading o
One Risk-Free One-Risky Asset
Two Risky Assets
More than Two Risky Assets
Many Risky Assets One Risk-Free Asset
Optimal Portfolio Choice
Satya P. Das
March 9, 2016
Satya P. Das
Optimal Portfolio Choice
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One Risk-Free One-Risky Asset
Two Risky Assets
Financial Markets Facilitating Inter- and Intra-Temporal
Trade
Satya P. Das
February 16, 2016
Satya P. Das
Inter- and Intra-Temporal Trade
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Introduction
We change gear now and aim to understand, through abstract models,
how financial markets or inst
Introduction to Financial Economics
Satya P. Das
January 20, 2016
Introduction to Financial Economics
Satya P. Das
1/8
Why Study Financial Economics?
To understand how dierent financial instruments and markets work, so
that one can take informed decision
Bonds and Interest Rates
Satya P. Das
April 18, 2016
Satya P. Das
Bonds and Interest Rates
1 / 50
Introduction
Weve already studied it partly under Financial Markets.
Aim was to get introduced to interest rate and bond market.
We covered
I
I
I
I
I
I
I
I
I
Review of Statistical Concepts of Mean, Variance,
Standard Deviation, Covariance and Correlation
Review: Statistics
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February 24, 2016
Satya P. Das
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Mean, Expected Value or Simply Expectation
All three refer to the same thing: an average
Pricing of Options
Satya P. Das
May 4, 2016
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Pricing of Options
1 / 27
Determinants of Options Pricing
We know from the theory of demand and supply that the equilibrium
price of a good or service depends on factors like income, prices of
subst
Financial Intermediaries
Satya P. Das
February 10, 2016
Financial Intermediaries
Satya P. Das
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Different Types
Depository Institutions like commercial banks, thrifts, credit unions (we
have covered)
Mortgage companies (Read yourself from Net)
Contra
Econ 490 Game Theory
Spring 2016 Midterm Answer Key
1. (a)
Scarecrow has two actions at three decision nodes, so Scarecrow has
eight strategies: 2 2 2 = 8. Scarecrows strategies are (N1, N4, N5), (N1, N4,
S5), (N1, S4, N5), (S1, N4, N5), (N1, S4, S5), (S1
MINISTRIO DA EDUCAO
UNIVERSIDADE FEDERAL DE PELOTAS
PR REITORIA DE PESQUISA E PS GRADUAO
PROGRAMA ANALTICO E EMENTA DE DISCIPLINA DA PS GRADUAO
IDENTIFICAO
Disciplina
Matemtica I
Departamento
Economia
Professor Responsvel pela Disciplina
Marcelo de Olivei
Methodological considerations
SEPT 2 2014
Economos- before Christ
Orthodox economics- extremists neoclassical economics, example ideas: they think
information for decision-making is complete and perfect, market is efficient and self
regulated
- all econo
MIDTERM REVIEW
1. What is the relationship between political economy and economy itself?
(provide example)
-precise understanding of PE helps to understand economics itself much
more accurately, economics was famous and still is as political economy,
The
E490: Financial Economics Final Exam Topics Partial
Review, Spring 2016
Satya P. Das
May 4, 2016
E490: Financial Economics Final Exam Topics Partial Review, Spring 2016
Satya P. Das
1 / 37
These slides are NOT a substitute for slides or
material discussed
Equity Valuation
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March 30, 2016
Satya P. Das
Equity Valuation
1 / 27
Introduction
To find mispriced securities is a constant endeavor by stock analysts.
One way is to run a regression such as SIM and calculate and 0
means that it is an underp
Behavioral Finance
Satya P. Das
April 11, 2016
Satya P. Das
Behavioral Finance
1 / 36
Introduction
Efficient Market Hypothesis (EMH) says that, on average, security prices
reflect all information available to investors (otherwise there will be
profitable
Trading Strategies with Options
Satya P. Das
May 4, 2016
Satya P. Das
Trading Strategies with Options
1 / 15
Introduction
Weve seen profit pattern from single options.
They were one-sided. For instance, a call option holder obtains
positive profits if the
Preferences under Uncertainty - Expected Utility
Hypothesis
Satya P. Das
February 24, 2016
Satya P. Das
Expected Utility Hypothesis
1 / 29
Which Point on the Budget Line?
Lets go back to the insurance
problem.
An individual has $35,000
initially.
Cg
Selli
Introduction to Derivatives
Satya P. Das
April 25, 2016
Satya P. Das
Introduction to Derivatives
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Derivatives: Broad Kinds
Derivatives refer to securities whose prices are derived from prices of
underlying investment assets like stock, bonds, curren