Answers to practice problem 2
1.
(i) (a)
Y=
(ii) (a)
C 0+ I 0
1b ;
Y=
(b) 1400
C0 + I 0
1ab
(b) you can skip this part as multipliers not done in class
4.
5.
(a)
P=30 ; Q=70
(b)
P=17 ; Q=91
PB =5, PC =3
QB =70,Q C =90
6. P =2, Q =3
7.
P1=4, P2=7, P3=6
ECO 134: Applied Mathematics I
Lecture 2
Todays topics covered in class:
From todays lecture you (students) should be able to answer the following
questions.
1. What is a mathematical approach in solving economic model?
2. What is a variable?
2.a What is
ECO 134
(Sections 7 and 13)
Instructor: Kanti Ananta Nuzhat (KNz)
Practice Problems on Equilibrium Analysis in Economics
1. (i) Assume a simple two sector economy where
Assume further that
C0 =85, b=0.9,I 0=55.
Y =C +I , C=C 0+bY ,I =I 0 .
Find the equili
Practice Problems on Functions
ECO 134 (sections 1 and 13)
Faculty Name: Kanti Ananta Nuzhat
1. Does the relationship between the variables Y and C in the following equation define
a function? Show it.
C=12+0.3 Y
2. Is
Qd =1202 P
a function? Why? What is
P1.T4. Valuation & Risk Models
Bionic Turtle FRM Practice Questions
Reading 22
Hull, Options and Other Derivatives
Binomial Trees (Chapter 12)
The Black-Scholes-Merton Model (Chapter 14)
The Greek Letters (Chapter 18)
By David Harper, CFA FRM CIPM
www.
P1. Mock Exam D
FRM 2012 Practice Questions
By David Harper, CFA FRM CIPM
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Table of Contents
Question 1: On- and off-balance-sheet foreign exchange (FX) risk hedges . 3
Question 2: Capital asset pricing model (CAPM) . 3
Question 3: EWM
Bionic Turtle FRM Practice Questions
P1.T4. Valuation and Risk Models
Interactive Quiz
By David Harper, CFA FRM CIPM
www.bionicturtle.com
P1.T4. VALUATION AND RISK MODELS . 3
P1.T4.409 VALUE AT RISK (VAR), BASIC . 3
P1.T4.410. VALUE AT RISK, LINEAR VERSUS
P1. Mock Exam B
FRM 2012 Practice Questions
By David Harper, CFA FRM CIPM
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Table of Contents
Question 1: Lognormal property of stock prices under GBM . 3
Question 2: Derivatives . 3
Question 3: OLS estimators in a multiple regression .
P1. Mock Exam C
FRM 2012 Practice Questions
By David Harper, CFA FRM CIPM
www.bionicturtle.com
Table of Contents
Question 1: Price and quantity of risk . 3
Question 2: Weighting schemes to estimate volatility . 3
Question 3: Corporate bond indentures (Fab
P1. Mock Exam A
FRM 2012 Practice Questions
By David Harper, CFA FRM CIPM
www.bionicturtle.com
Table of Contents
Question 1: When does risk management add value? . 3
Question 2: Portfolio alpha . 3
Question 3: Portfolio information ratio (IR) . 3
Question
P1.T4. Valuation & Risk Models
Bionic Turtle FRM Practice Questions
Reading 18
Allen, Understanding Market, Credit and Operational
Risk: The Value at Risk Approach
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P1. Mock Exam E
Bionic Turtle FRM Mock Exams
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P1.T4. Valuation & Risk Models
Bionic Turtle FRM Practice Questions
Global Topic Drill
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P1.T4. Valuation and Risk Models
Interactive Quiz
By David Harper, CFA FRM CIPM
www.bionicturtle.com
P1.T4. VALUATION AND RISK MODELS . 3
P1.T4.409 VALUE AT RISK (VAR), BASIC . 3
P1.T4.410. VALUE AT RISK, LINEAR VERSUS
P1.T4. Valuation & Risk Models
Bionic Turtle FRM Practice Questions
Reading 24
Dowd, Measuring Market Risk
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Reading 34
Gerhard Schroeck, Risk Management and Value
Creation in Financial Institutions
By David Harper, CFA FRM CIPM
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Schroeck, Chapter 5, pp. 170-186 only: Capital
P1.T4. Valuation & Risk Models
Bionic Turtle FRM Practice Questions
Reading 29
Principles for Sound Stress Testing Practices and
Supervision
By David Harper, CFA FRM CIPM
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Principles for Sound Stress Testing Practices and
Supervision,
Topic 19: Hypothesis Testing and Confidence Intervals
Test ID: 8450948
Question #1 of 82
Question ID: 438835
The table below shows a sample of returns on two securities:
Period
1
2
3
4
Mean
Security P
0.2%
0.5%
1.1% 0.6%
0.3%
Security Q
0.3%
0.9%
1.5% 0.5
Topic 16 - Basic Statistics
Test ID: 8450922
Question #1 of 54
Question ID: 438780
In a negatively skewed distribution, what is the order (from lowest value to highest) for the distribution's mode, mean, and median
values?
A) Mean, median, mode.
B) Medi
Topic 19: Hypothesis Testing and Confidence Intervals
Test ID: 8450948
Question #1 of 82
Question ID: 438835
The table below shows a sample of returns on two securities:
Period
1
2
3
4
Mean
Security P
0.2%
0.5%
1.1% 0.6%
0.3%
Security Q
0.3%
0.9%
1.5% 0.5
Topic 24: Hypothesis Tests and Confidence Intervals in Multiple
Regression
Test ID: 8450984
Question #1 of 21
Question ID: 438976
A dependent variable is regressed against three independent variables across 25 observations. The regression sum of squares
i
Topic 21: Linear Regression with One Regressor
Test ID: 8450958
Question #1 of 37
Question ID: 438933
Which of the following statements regarding the coefficient of determination is least accurate? The coefficient of determination:
A) may range from 1 to
Topic 24: Hypothesis Tests and Confidence Intervals in Multiple
Regression
Test ID: 8450984
Question #1 of 21
Question ID: 438976
A dependent variable is regressed against three independent variables across 25 observations. The regression sum of squares
i
Topic 16 - Basic Statistics
Test ID: 8450922
Question #1 of 54
Question ID: 438780
In a negatively skewed distribution, what is the order (from lowest value to highest) for the distribution's mode, mean, and median
values?
A) Mean, median, mode.
B) Median
Topic 15 - Probabilities
Test ID: 8450917
Question #1 of 21
Question ID: 438710
A company says that whether its earnings increase depends on whether it increased its dividends. From this we know:
A) P(dividend increase or earnings increase) = P(both divi
Topic 17 - Distributions
Test ID: 8450933
Question #1 of 32
Question ID: 438802
Standardizing a normally distributed random variable requires the:
A) mean and the standard deviation.
B) variance and kurtosis.
C) natural logarithm of X.
D) mean, varian
Topic 21: Linear Regression with One Regressor
Test ID: 8450958
Question #1 of 37
Question ID: 438933
Which of the following statements regarding the coefficient of determination is least accurate? The coefficient of determination:
A) may range from 1 to
Topic 17 - Distributions
Test ID: 8450933
Question #1 of 32
Question ID: 438802
Standardizing a normally distributed random variable requires the:
A) mean and the standard deviation.
B) variance and kurtosis.
C) natural logarithm of X.
D) mean, variance a
Topic 22: Regression with a Single Regressor: Hypothesis Tests and
Confidence Intervals
Test ID: 8450964
Question #1 of 17
Question ID: 438947
Consider the regression results from the regression of Y against X for 50 observations:
Y = 0.78 + 1.2 X
The sta