Focusing in groups is a unique data resource because of the dynamic interaction among the participants, who are encouraged to express their opinions, whether contradicting or conforming with others in the group.

4. Explain: The survey has been historically considered a quantitative tool. However, surveys can be a helpful qualitative tool.

5. Hypothesis: More practical distribution of categorical funds is possible with increased autonomy in allocation at the district level and community engagement.

How many times does Ned pay to get the street plowed per month? Assume that he only factors in his personal marginal benefit. Briefly explain how you reached your answer. b. How many times does Homer pay to get the street plowed per month? Assume that he only factors in his personal marginal benefit.

c.What is the efficient number of times for the street to be plowed? Briefly explain how you reached your answer.

d. In a well-labeled diagram, with a number of street plowings on the horizontal axis and price on the vertical axis, draw your answers to parts a, b, and c. (Your figure does not have to be drawn to scale. However, you should be sure to draw and label any relevant benefit and cost curves, and be sure to denote how your answers to parts (a), (b), and (c) can be seen.)

Problem 1. The Shoemaker Family makes shoes. They want to produce a unique leather shoe for women; however, they want to evaluate whether they can make a profit. They want to find out how many pairs of shoes they must make to break even. The company has determined that it would cost $2,000 to set up production to manufacture the shoes. Accounting has provided you the raw data which has determined each pair would cost approximately $60 marginal cost to make from similar models. Marketing Research has determined that each pair would sell for $80 based upon similar models. From the raw data create a pivot table to determine exact average marginal cost and average selling price. A) Place the data in the appropriate data cells. B) Place the appropriate formulas given in column H to the appropriate place in column F. C) Using Excel, how large must the order where a break-even point is obtained? Use the data in the word problem to solve for the correct Production Quantity. D) Make a Chart on this worksheet. Using the Production Qty, the Revenue and Cost... create a scatter chart with lines to show the breakeven crossover point. Label your chart "Breakeven". Highlight the Production Qty cell in column H where the crossover occurs. Problem 1E. D) The Shoemaker family is second-guessing themselves. only the sunray model was used. From the Problem 1 raw data table, create a pivot table to capture all the average costs associated with the sunray model. Use this value to enter into the Marginal Costs associated for the break-even analysis. FOR THIS VALUE, Don't round up to whole dollar value...allow it to be a 2-decimal value. Determine the breakeven from this model's historic values. E) Using Excel, Chart possible outcomes to reflect a visualization and breakeven point of the analysis.

answer every question

Stock XYZ has the following characteristics: The current price is 40. The price of a 35-strike 1-year European call option is 9.12. The price of a 40-strike 1-year European call option is 6.22. The price of a 45-strike 1-year European call option is 4.08. The annual effective risk-free interest rate is 8%. Let S be the price of the stock one year from now. All call positions being compared are long. Determine the range for S such that the 45-strike call produce a higher profit than the 40- strike call, but a lower profit than the 35-strike call. (A) S < 38.13 (B) 38.13 < S < 40.44 (C) 40.44 < S < 42.31 (D) S > 42.31 (E) The range is empty. 12. Consider a European put option on a stock index without dividends, with 6 months to expiration and a strike price of 1,000. Suppose that the effective six-month interest rate is 2%, and that the put costs 74.20 today. Calculate the price that the index must be in 6 months so that being long in the put would produce the same profit as being short in the put. (A) 922.83 (B) 924.32 (C) 1,000.00 (D) 1,075.68 (E) 1,077.17.

16. The current price of a non-dividend paying stock is 40 and the continuously compounded risk-free interest rate is 8%. The following table shows call and put option premiums for three-month European of various exercise prices: Exercise Price Call Premium Put Premium 35 6.13 0.44 40 2.78 1.99 45 0.97 5.08 A trader interested in speculating on volatility in the stock price is considering two investment strategies. The first is a 40-strike straddle. The second is a strangle consisting of a 35-strike put and a 45-strike call. Determine the range of stock prices in 3 months for which the strangle outperforms the straddle. (A) The strangle never outperforms the straddle. (B) 33.56 < ST < 46.44 (C) 35.13 < ST < 44.87 (D) 36.57 < ST < 43.43 (E) The strangle always outperforms the straddle.

The current price for a stock index is 1,000. The following premiums exist for various options to buy or sell the stock index six months from now: Strike Price Call Premium Put Premium 950 120.41 51.78 1,000 93.81 74.20 1,050 71.80 101.21 Strategy I is to buy the 1,050-strike call and to sell the 950-strike call. Strategy II is to buy the 1,050-strike put and to sell the 950-strike put. Strategy III is to buy the 950-strike call, sell the 1,000-strike call, sell the 950-strike put, and buy the 1,000-strike put. Assume that the price of the stock index in 6 months will be between 950 and 1,050. Determine which, if any, of the three strategies will have greater payoffs in six months for lower prices of the stock index than for relatively higher prices. (A) None (B) I and II only (C) I and III only (D) II and III only (E) The correct answer is not given by (A), (B), (C), or (D)Determine which of the following is NOT a distinguishing characteristic of futures contracts, relative to forward contracts. (A) Contracts are settled daily, and marked-to-market. (B) Contracts are more liquid, as one can offset an obligation by taking the opposite position. (C) Contracts are more customized to suit the buyer's needs. (D) Contracts are structured to minimize the effects of credit risk. (E) Contracts have price limits, beyond which trading may be temporarily halted. 31. DELETED 32. Judy decides to take a short position in 20 contracts of S&P 500 futures. Each contract is for the delivery of 250 units of the index at a price of 1500 per unit, exactly one month from now. The initial margin is 5% of the notional value, and the maintenance margin is 90% of the initial margin. Judy earns a continuously compounded risk-free interest rate of 4% on her margin balance. The position is marked-to-market on a daily basis. On the day of the first marking-to-market, the value of the index drops to 1498. On the day of the second marking-to-market, the value of the index is X and Judy is not required to add anything to the margin account. Calculate the largest possible value of X. (A) 1490.50 (B) 1492.50 (C) 1500.50 (D) 1505.50 (E) 1507.50.

Several years ago, John bought three separate 6-month options on the same stock. Option I was an American-style put with strike price 20. Option II was a Bermuda-style call with strike price 25, where exercise was allowed at any time following an initial 3-month period of call protection. Option III was a European-style put with strike price 30. When the options were bought, the stock price was 20. When the options expired, the stock price was 26. The table below gives the maximum and minimum stock price during the 6 month period: Time Period: 1st 3 months of Option Term 2nd 3 months of Option Term Maximum Stock Price 24 28 Minimum Stock Price 18 22 John exercised each option at the optimal time. Rank the three options, from highest to lowest payoff. (A) I > II > III (B) I > III > II (C) II > I > III (D) III > I > II (E) III > II > IThe current price of a medical company's stock is 75. The expected value of the stock price in three years is 90 per share. The stock pays no dividends. You are also given i) The risk-free interest rate is positive. ii) There are no transaction costs. iii) Investors require compensation for risk. The price of a three-year forward on a share of this stock is X, and at this price an investor is willing to enter into the forward. Determine what can be concluded about X. (A) X < 75 (B) X = 75 (C) 75 < X < 90 (D) X = 90 (E) 90 < X 39. Determine which of the following strategies creates a ratio spread, assuming all options are European. (A) Buy a one-year call, and sell a three-year call with the same strike price. (B) Buy a one-year call, and sell a three-year call with a different strike price. (C) Buy a one-year call, and buy three one-year calls with a different strike price. (D) Buy a one-year call, and sell three one-year puts with a different strike price.

An investor is analyzing the costs of two-year, European options for aluminum and zinc at a particular strike price. For each ton of aluminum, the two-year forward price is 1400, a call option costs 700, and a put option costs 550. For each ton of zinc, the two-year forward price is 1600 and a put option costs 550. The annual effective risk-free interest rate is 6%. Calculate the cost of a call option per ton of zinc. (A) 522 (B) 800 (C) 878 (D) 900 (E) 1231 41. XYZ stock pays no dividends and its current price is 100. Assume the put, the call and the forward on XYZ stock are available and are priced so there are no arbitrage opportunities. Also, assume there are no transaction costs. The annual effective risk-free interest rate is 1%. Determine which of the following strategies currently has the highest net premium. (A) Long a six-month 100-strike put and short a six-month 100-strike call (B) Long a six-month forward on the stock (C) Long a six-month 101-strike put and short a six-month 101-strike call (D) Short a six-month forward on the stock (E) Long a six-month 105-strike put and short a six-month 105-strike call

You are given the following information about two options, A and B: i) Option A is a one-year European put with exercise price 45. ii) Option B is a one-year American call with exercise price 55. iii) Both options are based on the same underlying asset, a stock that pays no dividends. iv) Both options go into effect at the same time and expire at t = 1. You are also given the following information about the stock price: i) The initial stock price is 50. ii) The stock price at expiration is also 50. iii) The minimum stock price (from t = 0 to t = 1) is 46. iv) The maximum stock price (from t = 0 to t = 1) is 58. Determine which of the following statements is true. (A) Both options A and B are "at-the-money" at expiration. (B) Both options A and B are "in-the-money" at expiration. (C) Both options A and B are "out-of-the-money" throughout each option's term. (D) Only option A is ever "in-the-money" at some time during its term. (E) Only option B is ever "in-the-money" at some time during its term.

This question is about the price and welfare effects of financial innovation when not all future outcomes are equally salient to investors. Consider an economy over three dates t = 0, 1, 2 with two assets B and A, which pay off at t = 2. B pays R > 1 for sure, while A pays yi with probability i where i indexes the three possible states of the world at t = 2, which are: g (growth), d (downturn), r (recession). Assume that yg > 1 > yd > yr and that g > d > r. At t = 0 both assets, which are in unit supply, are owned by a patient risk-neutral intermediary with preferences max E [C0 + C1 + C2] . The economy also has an infinitely risk-averse investor with initial wealth w and preferences max E [C0 + C1 + min (C2g, C2d, C2r)] where > 1. At t = 0 financial claims are traded and prices set. At t = 1 a signal s {sL, sH} observed, claims are re-traded and new prices set. Here sH is a "good signal" which raises the probability of state g and reduces that of r, while sL is a "bad signal" which raises the probability of r and reduces that of d. The exact signal distribution will not be important for answering the questions. At t = 2 returns are realized and distributed. Assume that both actors are price-takers and that asset prices are determined to equate demand and supply. Part A Assume that both actors are rational, and that the financial claims traded, which we label the bond and the share, coincide with the basic assets B and A. (a) Show that at t = 0 the investor's reservation price is R for the bond and yr for the share. What is the intermediary's reservation price for these two financial claims? From now on, assume that yr < E1 [y|sL]. Argue that this condition implies that there is no trade in shares. (E1 [.|.] denotes conditional expectations at t = 1.) (b) To solve for the equilibrium in the bond market at t = 0, plot the demand curve of the investor and the supply curve of the intermediary in a diagram where the vertical axis is the bond price and the horizontal axis is the bond quantity. Recalling that the investor may be constrained by her total wealth, show that demand is first horizontal then decreasing, and compute the point at which is starts to decrease. Explain why supply is a step function. Assuming that w is large enough, what is the equilibrium bond price pB,0? Indicate the area in the diagram which measures the gains from trade. (c) What is the bond price at t = 1 after the signal is realized? Why? Part B Now we introduce financial innovation. Both actors are still rational, but now the intermediary can repackage some of the payoffs of A to obtain a new synthetic safe bond which promises to pay R with certainty at t = 2. The synthetic bond is a perfect substitute for the true bond and can be sold to the investor, while the intermediary keeps the residual risky claim. (d) What is the maximum amount of synthetic bonds that the intermediary can create from the unit supply of A?

Noughts and Crosses is a game played by two players (O and X) on a board with nine positions numbered as follows: 1 2 3 4 5 6 7 8 9 The players place their marks (O and X) in unoccupied positions on the board until the game is complete. A completed game is when either (a) there is a straight line of three Xs giving a win for X, or (b) there is a straight line of three Os giving a win for O, or (c) all nine positions are occupied, in which case the game is drawn. O is the first player to move. It is required to construct an ML structure representing the tree of all possible games. Each node of the tree should represent a reachable board state, with the root being the empty board, and the leaf nodes corresponding to won, lost or drawn games. Define the ML datatype tree that you would use to represent this game tree. [3 marks] Define the function mktree : unit->tree to construct the complete game tree, explaining carefully how it works. There is no need for your implementation to be efficient in either space or time. [10 marks] Briefly discuss ways in which your implementation of mktree could be made more efficient. [4 marks] Define a function Owins : tree->int which when applied to the complete tree will yield the number of distinct games in which O wins.