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- Consider the following utility function: u = 400 (1 + 1)−1. xy a. Is this utility function homogenous? Briefly explain. b. Use implicit differentiation to find the MRCS. c. Write down an expression for the indifference curve if u = 20.Tom's discount factor = 0.7. Interpret this assumption.Economics Compute (F/A, %13,20) using the closed-form formula and call that X, Also approximate it; by applying linear interpolation between the values obtained from "compound interest factors" table for (F/A,%12,20) and (F/A,%15,20) and call that Y. What is X-y? Choose the closest value to your answer. A 11.3664 C 1.2358 D -1.2358 11.3664
- Consider the generalised linear regression model: y = Xẞ + e, with E[e] = 0 and E[ee] = 022. Let the model be estimated using both OLS and GLS, and let the OLS estimator of ẞ be denoted as BOLS and its GLS estimator as BGLS. Which of the following statements are incorrect about the OLS and GLS estimators? (a) BOLS is BLUE (b) BGLS is BLUE (c) The variance of BOLS cannot be less than that of BGLS (d) BGLS is more efficient that BOLSIf there is positive correlation between two sets of numbers, then _______. Group of answer choices r = 0 r < 0 r > 0 SSE=1 MSE = 1Economics Compute (F/A,%13,20) using the closed-form formula and call that X Also approximate it; by applying linear interpolation between the values obtained from "compound interest factors" table for (F/A,%12,20) and (F/A,%15,20) and call that y. What is X- y? Choose the closest value to your answer. A 0 (B) 11.3664 c) -11.3664 D 1.2358 E) -1.2358
- To 4-digit accuracy, what is the Mean of IWM return and the Mean of EEM return?Find the numerical value of factor (F/A,19%,20) using: a) the interpolation. b) the formula.The variance ratio (VR) can be used to determine whether returns satisfy the efficient market hypothesis (EMH). Let n = 5 and r5,t be the five period log return at time t, where t = 1, 2,..., T. 1. Express (r5,t — Ã5) in terms of deviations of the relevant one period log returns from their respective means. Denote 75 to be the mean of the five period log return.
- Using the current rate method, COGS is translated using a combination of historical and average rates. ATrue BFalseSuppose two asset returns are described by a two factor model, n = 0% + 11 + 1.82 + e1 2 = -1% + 2/1 + 0.52 + e2 where the volatility of first factor is 30%, the volatility of the second factor is 10%, and the correlation between the two factors is 0.5. Suppose also that the volatilities of the error terms ej and ez are both 10%. What is the covariance of n and r2 ? (Nearest 0.0001).How do you calculate the value at a node in a binomial tree? A. As a present value of the two possible values from the next period В. Average of the present value of the possible values from the next period OC. Sum of the present values of the two possible values from the next period D. Average of the future values of the two possible values from the next period