Business Plan During this course, you have learned to develop all the essential elements of a Business Plan, it was either an existing company on the NASDAQ exchange which is the "American stock exchange, which is located at One Liberty Plaza in New York City known as the New York Stock Exchange" or "a company that you would like to start one day". Some of your plans will be hypothetical, as access to certain information in the company is restricted, but you can focus on the actual existing customers and products or services the company offers to the public. If you are developing your own company it will be made up so just answer the questions that are being asked.

Attached is a Business Plan Template, fill in the information it is asking for it is under the Home Tab, under e-text.

This week is the final step to completing the Business Plan. The Executive Summary. It comes first in the Business Plan but is wrote last. It is a summary of everything you wrote. The sections you should include in the Executive Summary is:

Executive Summary This section is a summary of the information from the pages that follow. Prepare it last, after the business plan has been written. It should not exceed two pages. Headings to use in the Executive Summary:

A. Vision/Mission Statement B. Company Summary C. Products/Services D. Market Assessment E. Strategic Implementation F. Expected Outcomes

The Executive Summary is a brief description of A-F that that is above. It is part of a Business Plan. Your Business Plan is mostly steps 1-2-3. The executive summary completes it.

Your final project should include in one document:

Problem 3 (Savings with Incomplete Markets, General Exam 2001) Consider the following OLG economy with incomplete markets. Each individual lives for two periods. Population is constant. Each generation consists of a continuum of individuals. Individuals within a generation t are indexed by h. Let of(h) and cit, (h) denote the consumption of an individual h born in period t, when she is young and when she is old, respectively. Preferences are given by: E,U.(h) = log c/ (h) + BE,[log citi (h)], (1) where B > 0 and E, denotes expectations. During her youth, an individual receives a fixed endowment: y(h) = 1. Part of this endowment is consumed and part is saved for the next period. Let k,(h) denote savings. Therefore, the budget of an individual during youth is: 4 (h) + he(h) = 1. (2) Each individual invests her savings either in a safe storage technology, or in a risky en- trepreneurial project. If the individual specializes in the storage technology, her consump- tion during retirement is: Ci+1 (h) = oke(h) (3) where o > 0 is constant. If instead the individual chooses to specialize in the risky en- trepreneurial project, her consumption during retirement is: citi (h ) = Ati(h) ke(h). (4) The return Atti(h) is specific to individual h. It is i.i.d. across individuals, i.i.d. across time, and distributed as follows: Atti(h) = A= Ato with probability } A - o with probability } (5) where A = E[A] > > > 0; and o 2 0. Finally, define ge as the (gross) growth rate in the consumption of generation t over her life cycle: Soft, (h )dh Set (h)dh (6) 3 1. Use (1)-(4) to express E,U.(h) as a function of k,(h), depending on whether h spe- cializes in storage or the risky technology. 2. Define a such that E(log A) = logo at o = o. What are the signs of of and as? Next, define B = exp E (log A) . What are the signs of 25 and 24? Specify the values of B at o = 0, at o = o, and at o = A; and draw a picture of B as o varies in (0, A). What is the interpretation of B and &? When does individual h specialize in the risky technology, and when in storage? 3. Suppose we allow a risk-free bond to be traded. Let then R denote the risk-free rate, What is R when o &? 4. What are the optimal savings, ki(h), for individual h? How does the saving rate depend on R, B, and o? 5. Derive g from (6). What is g at o = 0? What is g at o a? 6. Drop (1) and suppose instead that preferences are given by (7) Then, redefine B as: B(o) = {E (A)' ]); and redefine & by B() = 6. Explain the following: (a) What is the degree of relative risk aversion and the elasticity of intertemporal substitution implied by (7)? (b) How do the sign and the magnitude of 25 depend on y? (c) What are the signs of 25 and 28