Practical Management Science
6th Edition
ISBN: 9781337406659
Author: WINSTON, Wayne L.
Publisher: Cengage,
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Chapter 8, Problem 2C
Summary Introduction
The case deals about the selection of project at the natural gas firm. Company E is a large energy company. The diverse nature of the company is always keeping the manager of project development Person CE. Person CE is currently about to meet the relevant parties regarding the different proposals present for the next three years. The things to be done with the case was explained in the case.
To provide: A realistic recommendation to Person CE about the thing that should be done by the firm.
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Which of the following is true?
a)The maximin criterion is an approach in Optimization under uncertainty which finds a solution that has the best possible payoff.
b)The maximin criterion is an approach in Optimization under uncertainty which finds a solution with the best worst possible payoff.
c)A risk profile represents the probability distribution of uncertain inputs.
d)Decision tree is a method to solve any optimization problem when the outcomes are subject to uncertainty.
19.
What combination of x and y will yield the optimum for this problem?
Maximize $3x + $15y, subject to (1) 2x + 3y
≤
12 and (2) 5x + 2y
≤
10 and (3) x, y
≥
0.
Part 2
A.
x = 0, y = 3
B.
x = 2, y = 0
C.
x = 0, y = 0
D.
x = 0, y = 4
E.
x = 1, y = 5
Use the following information for questions 34 through 39. A
$100 million portfolio consists of 35 million of stock 'with a beta
of 1 and 65 million of bonds at a modified duration of 8. As a
portfolio manager, you'd like to change the allocation to 50
million of stock and 50 million of bonds. In addition, you'd like
to adjust the beta to 1.2 and the modified duration to 7.25. A
stock index futures contract has a price of $225,000 and we
can assume the beta is 1. A bond futures contract is priced at
$92,000 with an implied modified duration of 5.9. If you want to
synthetically sell 15 million of bonds, how many futures
contracts should you transact?
Select one:
O a. Buy 173 contracts
O b. Sell 123 contracts
c.
Sell 173 contracts
O d. Buy 123 contracts
Chapter 8 Solutions
Practical Management Science
Ch. 8.3 - Prob. 1PCh. 8.3 - Prob. 2PCh. 8.4 - Prob. 3PCh. 8.4 - Prob. 4PCh. 8.4 - Prob. 5PCh. 8.5 - Prob. 6PCh. 8.5 - Prob. 7PCh. 8.5 - In the lawn mower production problem in Example...Ch. 8.6 - Prob. 9PCh. 8.6 - Prob. 10P
Ch. 8.6 - Prob. 11PCh. 8.6 - Prob. 12PCh. 8.7 - Prob. 13PCh. 8.7 - Prob. 14PCh. 8.8 - Prob. 15PCh. 8.8 - Prob. 16PCh. 8.8 - Prob. 17PCh. 8.8 - Prob. 18PCh. 8.8 - Prob. 19PCh. 8 - Prob. 20PCh. 8 - Prob. 21PCh. 8 - Prob. 22PCh. 8 - Prob. 23PCh. 8 - Prob. 24PCh. 8 - Prob. 25PCh. 8 - Prob. 26PCh. 8 - Prob. 27PCh. 8 - Prob. 28PCh. 8 - Prob. 29PCh. 8 - Prob. 30PCh. 8 - Prob. 31PCh. 8 - Prob. 32PCh. 8 - Prob. 33PCh. 8 - Prob. 34PCh. 8 - Prob. 35PCh. 8 - Prob. 36PCh. 8 - Prob. 37PCh. 8 - Prob. 38PCh. 8 - Prob. 39PCh. 8 - Prob. 1CCh. 8 - Prob. 2C
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