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    60. Consider the stock return data given below. StockMonth 1Month 2Month 3Month 4              Month 5 A12.0710.1214.5446.58-19.34 B15.954.166.31-2.746.54 C30.5216.5134.2545.62-27.21 D32.4221.3613.848.12-6.84 Develop and solve the Markowitz model that maximizes expected return subject to a maximum variance of 35. Use this model to construct an efficient frontier by varying the maximum allowable variance from 25 to 55 in increments of.
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    52. A distributor has generated a rough estimate of aftershave demand at their retails store. The distributor is confident that demand will range from 100 to 650. The following table lists weights for demand values within this range. ? Demand230330430530 Weight0.150.250.350.25 ? The distributor pays a wholesale price of $21 per aftershave and then sells at.
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    21. All the values of computer-generated random numbers are a. Poisson distributed. b. lognormally distributed. c. uniformly distributed. d. normally distributed.     22. The __________ function is used to generate a pseudorandom number in Excel. a. FREQUENCY() b. RAND() c. NORM.INV() d. ROUND()     23. Which of the following parameters is required to convert a computer-generated random variable into a uniform random variable? a. Range of the distributionb. Mean of the distribution c. Variance of the distributiond.               Moments.
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    56. Consider the following data on the returns from bonds. Year ?12345678 Bond 10.200.1260.321-0.39-0.670.135              0.52              0.75 Bond 20.1280.210.325-0.2430.1690.125              0.304              0.286 Bond 30.1670.270.426-0.840.143-0.46              0.147              0.704 a. Construct the Markowitz portfolio model using a required expected return of at least 15 percent. Assume that the 8 scenarios are equally likely to occur.b. Solve the model using Excel Solver.     .
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    54. A specialty hedge fund is considering the purchase of a Jackson Pollock painting. It estimates the value of the painting to be $185 million. In an auction, both the number of competing bids and the amount of the competing bids is uncertain. The hedge fund has maintained a file summarizing.
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    57. Greenbell Software Inc. conducted a study on its smartphone products in the market to determine which phone has the best features in terms of three prominent attributes: operating system of the phone (A or B), RAM (512MB or 1GB), and the rear camera specifications (3MP, 5MP, or 7MP). A sample.
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    43. A company has produced a new battery with an estimated mean lifetime of 60 hours. Management also believes that the standard deviation is 4.5 hours and that battery hours are normally distributed. To promote the new battery, management has offered to refund some money if the battery fails to reach.
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    53. A manufacturer wants to construct warehouses in six different locations of the city to supply dry cells to his customers on time. The manufacturer wants to construct the minimum number of warehouses such that each warehouse is within 40 miles of at least one other warehouse. The following table provides.
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    47. The exponential smoothing model is given by where     This model is used to predict the future based on the past data values. a. The observed values with the smoothing constant ? = 0.45 are given in the below table. The third column of the table displays the forecast values obtained using the above.
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    56. A store is offering a discount on 800 pairs of basketball shoes. The amount of the discount varies and is not revealed to the customer until checkout. The distribution of discounts is given in the below table. Discount Rate (%)Number of Tags 5250 20220 35120 5080 6570 9060 How many pairs of shoes does a customer have to.
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    44. An Investment firm offers free financial planning seminars at major hotels for groups of 30 individuals. Each seminar costs them $4,000 and the average first-year commission for each new enrollment is $6,000. The firm estimates that for each individual attending the seminar, there is a 0.05 probability that he/she will.
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    59. Develop a model that minimizes semivariance for the data given below with a required return of 15 percent. Define a variable for each scenario and let  with = 0. Then make the objective function: Min . Scenario Mutual FundYear 1Year 2Year 3Year 4 Large-Cap Growth41.5436.1832.76-20.63 Large-Cap Value32.4544.7828.6138.49 Small-Cap Growth26.137.04-23.9745.67 Small-Cap Value37.5618.5327.53-5.48 Solve the model you developed with.
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1. In a nonlinear optimization problem a. the objective function is a nonlinear function of the constraints. b. all the constraints are nonlinear only when the objective is to maximize the function of the decision variables. c. at least one term in the objective function or a constraint is nonlinear. d. both the objective function and the constraints must.
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    56. Greenbell Software Inc. conducted a study on its smartphone products in the market to determine which phone has the best features in terms of three prominent attributes: operating system of the phone (A or B), RAM (512MB or 1GB), and the rear camera specifications (3MP, 5MP, or 7MP). A sample.
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  45. The stock price of Robin Tires, Inc., listed on the Stock Exchange is currently $20. The following probability distribution shows how the price per share is expected to change over a three-month period: ? Stock Profit Change ($)Probability –30.25 –20.2 –10.05 00.15 +10.1 +20.15 +30.1 ? a. Construct a spreadsheet simulation model that computes the value of the stock profit in.
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    47. The quality of a device should be examined in the inspection department sequentially in three steps before it is sent to packaging department. The probability distributions for the time required to complete each of the activities are as follows: ? StepTime (minutes)Probability 130.15 50.25 70.35 90.25 2110.25 130.30 150.45 380.35 100.20 120.45 ? a. Construct a spreadsheet simulation model to estimate the average time.
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    46. A football tournament is conducted between Team-A and Team-B of a college and the winner being the first team to win four games of seven games. The probability that Team-A wins each game  are as follows: Game1234567 Probability of Win0.480.50.450.60.550.400.55 ? a. Set up a spreadsheet simulation model in which whether Team-A wins each game.
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    55. A specialty hedge fund is considering the purchase of a Jackson Pollock painting. It estimates the value of the painting to be $185 million. In an auction, both the number of competing bids and the amount of the competing bids is uncertain. The hedge fund has maintained a file summarizing.
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    48. Team X is scheduled to play against Team Y in an upcoming game in Baseball’s World Series. Assume that each player’s point production can be represented as an integer uniform variable with the ranges provided in the following table: ? PlayerTeam XTeam Y 1[4,10][2,4] 2[2,6][14,30] 3[7,20][2,20] 4[3,5][1,10] 5[6,20][8,20] 6[5,10][7,12] 7[7,10][14,20] 8[12,40][3,5] 9[9,20][14,25] ? a. Develop a spreadsheet model that simulates the points scored.
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    11. The values for random variables in a Monte Carlo simulation are a. selected manually. b. generated randomly from probability distributions. c. taken from forecasting analysis. d. derived secondarily using formulas.     12. The choice of the probability distribution for a random variable can be guided by a. an objective function. b. likelihood factors. c. forecasting. d. historical data.     13. Which of the following inferences about a variable of interest can be.
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    46. An Electrical Company has two manufacturing plants. The cost in dollars of producing an Amplifier at each of the two plants is given below. The cost of producing Q1 Amplifiers at first plant is: 65Q1 + 4Q12+ 90  and the cost of producing Q2 Amplifiers at the second plant is 20Q2 + 2Q22+.
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    48. Consider the economic order quantity (EOQ) model for multiple products that are independent except for a budget restriction. The following model describes this situation Let Dk = annual demand for product kCk = unit cost of product kSk = cost per order placed for product k i = inventory carrying charge as.
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    49. Gatson manufacturing company is willing to promote 2 types of tires: Economy tire and Premium tire. These two tires are independent of each other in terms of demand, cost, price, etc. An analytics team of this company has estimated the profit functions for both the tires as Monthly profit for Economy.
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    53. Mark and his friends are planning for a holiday party. Data on longitude, latitude, and number of friends at each of the 10 locations are given below. Mark would like to identify the location for the holiday party such that it minimizes the demand-weighted distance, where demand is the number.
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    31. In a simulation process, the error of the estimates of the output can be reduced by a. increasing the range of possible values for the random variables. b. increasing the number of random variables. c. increasing the number of trials per simulation. d. conducting regression analysis to forecast values.     32. According to the ___________, the sum of independent random variables.
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    60. Denver Transportation Company is considering investing in several projects that have varying capital requirements over the next four years. Faced with limited capital each year, management would like to select the most profitable projects that it can afford. The estimated net present value for each project, the capital requirements, and.
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    41. Sunseel Industries produces different types of raw materials and it is interested in using simulation to estimate the profit per unit for its new product X. The selling price for the product will be $40 per unit. Probability distributions for the raw material cost, the production cost, and the marketing.
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    57. Consider the following data on the returns from bonds. Year ?12345678 Bond 10.2000.0260.121-0.139-0.1670.135              0.152              0.175 Bond 20.1280.1000.125-0.2430.2690.225              0.204              0.186 Bond 30.0670.7000.226-0.1840.234-0.146              0.047              0.604 Develop and solve the Markowitz portfolio model using a required expected return of at least 15 percent. Assume that the 8 scenarios are equally likely to occur. Use this model to construct an.
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    21. In reviewing the image below, what is the minimum value for this function? a. –8 b. 0 c. –1 d. 1     22. Using the graph given below, which of the following equations is most likely to yield the above curve? a. f(X, Y) = Xlog(2ðY) + Ylog(2ðX) b. f(X, Y) = X – Y c. f(X, Y) = –X2 – Y2 d. f(X, Y) = Xsin(5ðX) + Ysin(5ðY)     23. Using.
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    54. A store is offering a discount on 800 pairs of basketball shoes. The amount of the discount varies and is not revealed to the customer until checkout. The distribution of discounts is given in the below table. ? Store LocationPotential Areas Covered L1    3, 4, 6, 8 L21, 5, 9 L31, 4, 7 L42, 6, 7 L53, 4,.
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    41. Jeff is willing to invest $5000 in buying shares and bonds of a company to gain maximum returns. From his past experience, he estimates the relationship between returns and investments made in this company to be: R = –2S2 – 9B2 – 4SB + 20S + 30B. where,R = total returns in thousands of.
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    11. A feasible solution is __________ if there are no other feasible points with a better objective function value in the entire feasible region. a. infeasible b. unbounded c. nonlinear d. a global optimum     12. If there are no other feasible points with a larger objective function value in the entire feasible region, a feasible solution is a. an efficient frontier. b. a global maximum. c. not.
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    54. Consider the return scenario for 3 types of mutual funds, shown in the following table: Scenario Mutual Fund123456 X-33.812.1129.9137.7-55.516.3 Y-45.515.858.934.6-39.8-64.5 Z-11.8128.8164.417.8-43.4-32.3 a. Develop the Markowitz portfolio model for these data with a required expected return of at least 20 percent. Assume that the six scenarios are equally likely to occur.b. Solve the model developed in part.
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    42. Salemach Corporation is a start-up company that manufactures simple machines. It is interested in analyzing the profit from a new machine. It estimates that the selling price will be $150 per unit and the setup and advertising costs will total $250,000. The company estimates that the per unit raw material.
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    58. Andrew is ready to invest $200,000 in stocks and he has been provided nine different alternatives by his financial consultant. The following stocks belong to three different industrial sectors and each sector has three varieties of stocks each with different expected rate of return. The average rate of return taken.
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    52. The manager of a supermarket estimates the average number of trips made to the warehouse from each of the 5 outlets. Some outlets have a higher number of average daily trips, and his goal is to relocate warehouse closer to these outlets. The available data on the distance between the.
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    53. Consider the table below with information regarding each activity, immediate predecessors, and duration estimates (in minutes) for each activity. ActivityImmediate PredecessorsMinimum TimeLikely Time              Maximum Time A—679 B—4911 CA3912 DB2612 EB, C3510 FD479 GE4715   a. Using the PERT distribution in ASP to represent the duration of each activity, construct a simulation model to compute the total time to complete the.
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1. A ___________ uses repeated random sampling to represent uncertainty in a model representing a real system and that computes the values of model outputs. a. Monte Carlo simulation b. what-if analysis c. deterministic model d. discrete event simulation     2. A simulation model extends spreadsheet modeling by a. extending the range of parameters for which solutions are computed. b. using real-time values for parameters from.
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    42. Consider the objective function, where, Y = total outputA= total-factor productivityL = labor inputK= capital inputα = capital input share of contribution for Lβ = capital input share of contribution for K ? a. Assume á = 0.33, β = 0.67, A = 10 and each unit of labor costs $45 and each unit.
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  31. If the portfolio variance were equal to zero, the amount of risk would be a. unity.b. a positive number greater than 1. c. negative always.d. zero.     32. One of the ways to formulate the Markowitz model is to a. maximize the variance of the portfolio subject to a constraint on the expected return of the portfolio. b. minimize the expected return of.
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    50. A tourist bus can accommodate 80 people and currently books up to 80 reservations. Past data shows that the tourist bus always accommodates all 80 reservations but that, on average, two people do not show up. To capture additional profit, the travel agent is considering an overbooking strategy in which.
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    58. Consider the data on investment made in four types of funds and returns from S&P 500. Mutual FundYear 1Year 2Year 3Year 4 Large-Cap Growth41.5436.1832.76-20.63 Large-Cap Value32.4544.7828.6138.49 Small-Cap Growth26.137.04-23.9745.67 Small-Cap Value37.5618.5327.53-5.48 S&P 500 Return33.1527.6215.8430.42 a. Develop an optimization model that will give the fraction of the portfolio to invest in each of the funds so that the return.
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    55. Consider the stock return data given below. StockMonth 1Month 2Month 3Month 4              Month 5 A12.0710.1214.5446.58-19.34 B15.954.166.31-2.746.54 C30.5216.5134.2545.62-27.21 D32.4221.3613.848.12-6.84 a. Construct the Markowitz model that maximizes expected return subject to a maximum variance of 35.b. Solve the model developed in part a. Round all your answers to three decimal places.     .
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  45. A Steel Manufacturing company has two production facilities that manufacture Dishwashers. Production costs at the two facilities differ because of varying labor costs, local property taxes, type of material used, volume, and so on. For Plant A, the weekly costs for producing a number of units of Dishwashers is expressed.
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