Total and average daily profit. Great Green, Inc., determines that its marginal revenue per day is given by R ' ( t ) = 75 e t − 2 t , R ' ( t ) = 75 e t − 2 t , R ( 0 ) = 0 , Where R ( t ) is the total accumulated revenue, in dollars, on the t th day. The company’s marginal cost per day is given by C ' ( t ) = 75 − 3 t , C ( 0 ) = 0 , where C ( t ) is the total accumulated cost, in dollars, on the t th day a. Find the total profit from t = 10 to t = 10 (see Exercise 45 ). $ 1 , 651.209.93 b. Find the average daily profit for the first 10 days. $ 165 , 120.99
Total and average daily profit. Great Green, Inc., determines that its marginal revenue per day is given by R ' ( t ) = 75 e t − 2 t , R ' ( t ) = 75 e t − 2 t , R ( 0 ) = 0 , Where R ( t ) is the total accumulated revenue, in dollars, on the t th day. The company’s marginal cost per day is given by C ' ( t ) = 75 − 3 t , C ( 0 ) = 0 , where C ( t ) is the total accumulated cost, in dollars, on the t th day a. Find the total profit from t = 10 to t = 10 (see Exercise 45 ). $ 1 , 651.209.93 b. Find the average daily profit for the first 10 days. $ 165 , 120.99
Solution Summary: The author explains the formula used to calculate the total profit from t=0tot = 10.
The OU process studied in the previous problem is a common model for interest rates.
Another common model is the CIR model, which solves the SDE:
dX₁ = (a = X₁) dt + σ √X+dWt,
-
under the condition Xoxo. We cannot solve this SDE explicitly.
=
(a) Use the Brownian trajectory simulated in part (a) of Problem 1, and the Euler
scheme to simulate a trajectory of the CIR process. On a graph, represent both the
trajectory of the OU process and the trajectory of the CIR process for the same
Brownian path.
(b) Repeat the simulation of the CIR process above M times (M large), for a large
value of T, and use the result to estimate the long-term expectation and variance
of the CIR process. How do they compare to the ones of the OU process?
Numerical application: T = 10, N = 500, a = 0.04, x0 = 0.05, σ = 0.01, M = 1000.
1
(c) If you use larger values than above for the parameters, such as the ones in Problem
1, you may encounter errors when implementing the Euler scheme for CIR. Explain
why.
#8 (a) Find the equation of the tangent line to y = √x+3 at x=6
(b) Find the differential dy at y = √x +3 and evaluate it for x=6 and dx = 0.3
Q.2 Q.4 Determine ffx dA where R is upper half of the circle shown below.
x²+y2=1
(1,0)
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