BEPP 305/805, Spring 2014
Problem Set 1
Please submit your answers via Canvas no later than 5pm on Friday, 1/24.
Question 1. Consider a random variable X with sample space cfw_x1, x2 and
probability distribution p(x1)=p1 and p(x2)=p2.
a) Write down the fo

BEPP 305 / 805 Risk Management
Solutions to Problem Set 1
Spring 2015
Question 1. Consider a random variable X with sample space cfw_x1, x2 and
probability distribution p(x1)=p1 and p(x2)=p2, where p1+p2=1.
a) Write down the formulas for E[X] and Var(X).

BEPP 305 / 805, Spring 2015
Problem Set 1
Due Monday 1/26/2015 by 11:59pm via Canvas
Instructions:
While you can work in a group, you must write up and submit your own
answers.
Answers must be submitted via Canvas.
You may scan or photograph and upload

BEPP 305-805 Practice Exam
MODULE III EXAM (WITH ANSWERS)
Taken from Fall 2012, Module III
Professor Greg Nini
Short Answers (32 total points). Answer the following as succinctly as possible. The space provided is
more than enough to get full credit.
1. (

INSR 305 / 805 Risk Management
Fall 2014
Professor Daniel Gottlieb
Solutions to Problem Set 1
Question 1. Consider a random variable X with sample space cfw_x1, x2 and
probability distributi

Problem Set 1 Solution Addendum
Professor Jeremy Tobacman
BEPP 305/805 Spring 2014
Some confusion has arisen about parts of Question 2 from Problem Set 1. The posted solutions
are correct, so feel free to ignore the following if you understand them alread

1
BEPP 305/805: Lecture 5
Daniel Gottlieb
2
Last Class
Bernoullis solution for the St. Petersburg Paradox
Evaluate the utility of all outcomes u(Xi)
Take the expectation E[u(X)]
But what is utility?
Can it be measured? In what units?
Can it be compa

BEPP 305-805 Practice Exam
MODULE III EXAM (WITH ANSWERS)
Taken from Spring 2012, Module III
Professor Greg Nini
Short Answers (30 total points). Answer the following as succinctly as possible. The space provided is
more than enough to get full credit. Al

PRACTICE MIDTERM I SOLUTIONS
Fall 2013
Part I: True or False, and Justify. (35 minutes) Determine whether each of the
following statements is true or false, and state either true or false. Then provide
a justication. Answers without justication will not b

Problem Set 2
Professor Jeremy Tobacman
BEPP 305/805 Spring 2015
I suggest you review the lecture notes and class slides on expected utility and the insurance
market before you work on this problem set. Submit your answers via Canvas no later than
11:59pm

PRACTICE MIDTERM QUESTIONS
(a) Please write down his pro.ts as a function of the price PD, _ =
_ (PD). What are his pro.ts in a slump? In a boom? What are
his expected pro.ts? (4 points)
(b) The developer is considering entering into a futures contract ba

BEPP 305 Practice 2
3. (22 Minutes)
ABC Inc. is a publicly-held firm with limited liability that will exist for only 3 years. It
has a cash flow of $0 at the end of the first year; $500 at the end of the second year; and
$3000 at the end of the third year

Practice Questions on Moral Hazard and Adverse Selection
Prof. Daniel Gottlieb
BEPP 305/805 - Fall, 2014
Question 1 (2012 Midterm). In a city, a total of 300 owners of used cars would like to sell their
cars. Each car may be good, fair, or bad. Out of the

BEPP 305 / 805 Risk Management
Solutions to Problem Set 1
Spring 2016
Question 1. Consider a random variable X with sample space cfw_x1, x2 and
probability distribution p(x1)=p1 and p(x2)=p2, where p1+p2=1.
a) Write down the formulas for E[X] and Var(X).

BEPP 305_Practice 1
4. Real Estate Development Risk. (44 points) A real estate developer has
$1,000,000 which he plans to invest in a new real estate development.
After he builds the development, he will be able to sell it for a price, PD.
This selling pr

BEPP 305/805 Module 1 Exam
Spring 2014 Sample Solutions
Professor Jeremy Tobacman
BEPP 305/805 has three sections, which meet at 10:30am, 1:30pm,
and 3pm. The morning section exam diered slightly from the afters
noon sections exam. Solutions below pertain

Problem Set 2 Sample Solutions
Professor Jeremy Tobacman
BEPP 305/805 Spring 2016
Question 1. This question asks you to study the distribution of Intel (INTC) stock returns.
You can nd historical prices on Canvas (intc [date].csv). Use the software you pr

BEPP 305 - MIDTERM I
Fall 2013
Rules:
Do not begin the exam until instructed to do so.
This is a closed-book, closed-notes exam. Calculators are allowed as long as they
do not store formulas.
You have 80 minutes to complete the exam.
Please be courteous t

Problem Set 3
BEPP 305/805 Spring 2014
I suggest you review the lecture notes and class slides on expected utility and the insurance
market before you work on this problem set. Submit your answers via Canvas no later than 5pm
on Friday, 2/7.
Question 1. J

Problem Set 3 Sample Solutions
Professor Jeremy Tobacman
BEPP 305/805 Spring 2016
Question 1. For each of the following utility functions, calculate the rst derivative and
the second derivative, and determine/discuss whether the utility function represent

Practice Questions on Moral Hazard and Adverse Selection
BEPP 305/805 Fall 2012
Question 1: An employer would like to hire workers for open positions in her company. Everyone
knows that half of the potential employees are skilled, and the other half is un

Problem Set 3
BEPP 305/805 Spring 2014
I suggest you review the lecture notes and class slides on expected utility and the insurance
market before you work on this problem set. Submit your answers via Canvas no later than 5pm
on Friday, 2/7.
Question 1. J

Problem Set 2 Sample Solutions
Professor Jeremy Tobacman
BEPP 305/805 Spring 2015
Question 1. This question asks you to study the distribution of Intel (INTC) stock returns.
You can nd historical prices on Canvas (Intel.csv). Use the software you prefer t

BEPP 305-805: Risk Management
Module III
Lecture 25
Olivia S. Mitchell
Wharton School, University of Pennsylvania
Fall 2014
Do DWH readings under Assignment 2 and answer 3 qs online
Goals of Lecture
Provide a brief introduction to the liability system.
A

BEPP 305/805, Lecture 4
Jeremy Tobacman
Consider the following gamble:
Toss a fair coin
If tails, you get $1
If heads, toss the coin again
If tails, you get $2
If heads, toss again
If tails, you get $4
If heads, toss again
.
If tails, you get $2n

BEPP 305-805: Risk Management
Module III: Lecture 24
Olivia S. Mitchell
Wharton School, University of Pennsylvania
Fall 2014
Goals of Lecture
Provide an introduction to corporate loss financing
techniques:
Commercial lines vs. personal lines
Big concepts

1
Your Name (please print): _
The Wharton School, University of Pennsylvania
BEPP 305/805 Module III Midterm
Spring 2017 ~ Jacqueline Volkman Wise
Exam Rules:
Do not begin the exam until instructed to do so.
This is a closed-book, closed-notes exam.
T

BEPP 305/805: Risk Management
Module III: Lecture 19
Olivia
S. Mitchell
Wharton, University of Pennsylvania
Fall 2014
Read AONs 2013 Global Risk Management Survey
Intro notes:
About me: Pensions, Social Security, risk
management.
Served on bipartisan Pre

BEPP 305/805, Spring 2017
Professor Neil Doherty
Rules:
Do not begin the exam until instructed to do so.
This is a closed-book, closed-notes exam. Calculators are allowed.
The exam is worth 100 points.
You have 90 minutes to complete the exam.
Please be c

BEPP 305/805 Module 1 Exam
Sample Solutions Spring 2017
Professor Jeremy Tobacman
Instructions: Out of the 10 True/False, Justify questions, your 8
best will count toward your grade. All 8 of your scores will count
from the 8 questions on the second part

Announcements
Midterm exam
Thursday 2/9, 6-7:30pm
Last names A thru L:
Last names M thru Z:
SHDH 350
SHDH 351
Closed book, closed note exam
Formula sheet (on Canvas) will be provided
Simple calculators will be provided if necessary
Let Beth Moskat know i

BEPP 305/805: Lecture 2
Jeremy Tobacman
The Flaw of Averages
Summary of Class 1
Common measures of risk standard deviation,
variance, VaR, expected shortfall sometimes
align with intuition
Probability theory formalizes notion of
uncertainty
In practice

1
BEPP 305/805: Lecture 5
Jeremy Tobacman
2
Roadmap
Bernoullis solution for the St. Petersburg
Paradox
Evaluate the utility of all outcomes u(x)
Take the expectation E[u(X)]
But what is utility?
Can it be measured? In what units?
Can we quantify ris