A video cassette recorder manufacturer is so certain of its quality control that it is offering a complete replacement warranty if a recorder fails within 2 years. Based upon compiled data, the company has noted that only 1 percent of its recorders fail during the first year, whereas 5 percent of the recorders that survive the first year will fail during the second year. The warranty does not cover replacement recorders. a) Formulate the evolution of the status of a recorder as a Markov chain whose states include two absorption states that involve needing to honor the warranty or having the recorder survive the warranty period. Then construct the one-step transition matrix. b) Find the probability that the manufacturer will have to honor the warranty.

Discuss what G. E. P. Box might have meant when he wrote “All models are wrong but some are useful.”

Question 1 Consider the CCAPM model and the following equation for the price of an asset in equilibrium: 1 C: (mi+1, Tt+1) + -E: (x+1), 1+Rf Pt = is the price of the asset at time t; x++1 is the payoff of the asset at time t+1; Rf indicates the return on the risk-free asset; m+1 is the stochastic discount factor; and E, and C; denote the conditional expectation and the conditional covariance given time-t information, respectively. where Pt Which of the following is true? A) The asset sells at a premium and the covariance term in the equation above is positive B) The asset sells at a premium and the covariance term in the equation above is positive if the asset gives a high payoff when consumption is low C) The asset sells at a premium and the covariance term in the equation above is positive if th asset gives a high payoff when consumption is high D) The asset sells at a premium and the covariance term in the equation above is negative if the asset gives a high payoff when consumption…

District Assessment of Topic / X K Scruz 00683 - G7M3 Topic A.pdf x b web.kamihq.com/web/viewer.html?state=%7B"ids"%3A%5B"1Fu-ewnjY8-E2hmPAR-e9hoqlfqx4hF4a"%5D%2C"action"%3.. C K E U-46 Links O History random - Soundtrap Imported O homework H Dashboard | Tinker. A Canton Middle Sch. Other bookmarks E Reading list Kami Student Edu O A 7th MATH - St.. SCruz 00683 - G7M3 Topic A.pdf 112% Submit So * Select Montserrat 18px 1.5pt : в I U A A O x, x2 Dictionary Read Aloud 3. Subtract: (4х + 7) — (18х — 2) A Markup 22x - 5 Comment ** T Text Box 18 - ÷ Equation Drawing Shapes Eraser 4. Write the expression below as a product of two factors. 9m + 15n - 6 Add Media Signature Page 1 /3 Sign out INTL 1 10:28

Why is Monte Carlo simulation necessary? Give an example of how it could be used in an actual business situation

I estimate a multiple linear regression model for portfolio  using market size and value and adding as usual a constant ( to make sure that E(errors)=0 as per the GM assumptions request ).  Then I wish to identify monthly effects so I generate a dummy for each month of the year , from January to December included . EViews will  Select one: a. send out an error message saying : near singular matrix . This is happening because I fell into the dummy variable trap because the sum of all the dummy variables is at any point in time equal to 1 . As a consequence the OLS estimator is not identified  b. send out an error message saying : near singular matrix . This is happening because I fell into the dummy variable trap because the costant (c) multiplies the regressor 1 and the sum of all the dummy variable is at any point in time equal to 1 . As a consequence the model is not identified and no estimator can estimate the betas  c. send out an error message saying : near singular…