GP 838 | Course Paper

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Below is the spreadsheet for a project selection model:

What is the total return obtained from all five projects?

A) $ 860,000

B) $ 550,000

C) $ 700,000

D) $ 395,000

Which of the following Excel functions is applied to test for significance of regression?

A) COVAR

B) ANOVA

C) SINH

D) TREND

Below is the spreadsheet for a portfolio allocation model.

Answer the following question(s) using a model with uncertainty on type of investment

return. Assume that the distributions of life insurance annual return is uniform with

minimum 4% and maximum 6%, bond mutual funds annual return is normal with mean

7% and standard deviation 1%, stock mutual funds annual return is lognormal with

mean 11% and standard deviation 4%. Use 10,000 trials and 1 for random seed for the

simulation.

What is the value of the mean obtained from the simulation results that maximizes the

total expected return? [Hint: Choose the approximate value.]

A) $ 5,876.28

B) $ 6,570.76

C) $ 7,257.45

D) $ 5,178.84

Below is a decision tree for the airline revenue management.

What is the expected value of the ticket when a discount is offered on the full fare?

[Hint: Choose the approximate value.]

A) $ 442.50

B) $ 472.00

C) $ 410.00

D) $ 501.50

Stone Age Surfboards is a small manufacturer of two types of popular low-tide

surfboards, the Graystone and the Lava models. The manufacturing process consists of

two departments: fabrication and finishing. The fabrication department has 8 skilled

workers, each of whom works 9.25 hours per day. The finishing department has 5

workers, each of whom works a 6 -hour shift per day. Each pair of Graystone

surfboards requires 2.5 labor hours in the fabrication department and 2 labor hours in

finishing. The Lava model requires 4.2 labor-hours in fabrication and 3.6 labor-hours in

finishing. The company operates 6 days a week. It makes a per unit profit of $40 on the

Graystone model and $60 on the Lava model. The company anticipates selling at least

twice as many Lava models as Graystone models.

If the unit profit on Graystone surfboards is increased by $10, what is the shadow price

for the finishing hours used?

A) $18.48

B) $17.39

C) $15.42

D) $14.15

Below is a payoff table that lists four mortgage options:

What is the worst payoff rate for the 5-year ARM?

A) $ 50,894

B) $ 48,134

C) $ 51,641

D) $ 55,895

Jonathan Reese is considering three stocks in which to invest with a fixed budget. The

table below provides information on Jonathan’s expected returns for each stock. The

table also provides information, collected from market researchers, on the

variance-covariance matrix of the individual stocks. He expects a total return of at least

10%.

Develop a quadratic optimization model to find the optimal allocation of the budget to

each stock, and variance calculations for squared terms and cross-products based on the

variance-covariance matrix.

According to the model, what is the squared term value for Stock 1 variance?

A) 0.00065

B) 0.00535

C) 0.01132

D) 0.00283

Which of the following 2010 Excel functions computes the p-value for the chi-square

test?

A) CHISQ.INV.RT

B) CHIDIST

C) CHI.SQ

D) CHISQ.TEST

Coppell Services contracts with outsourcing partners to handle various customer service

functions. Based on a study of call volumes provided by one of the firm’s partners, the

minimum number of staff needed for each hour of the day is as follows:

Mr. Coppell hires 6 permanent employees and wants to staff the remaining

requirements using part-time employees who work 4-hour shifts (four consecutive

hours starting as early as 8 A.M. or as late as 1 P.M.).

Which of the following best defines a binary variable?

A) It is a general integer variable that is restricted to being between -1 and 1.

B) It is a general integer variable that is restricted to being a multiple of 2.

C) It is a general integer variable that is restricted to being between 0 and 1.

D) It is a general integer variable that is restricted to being greater than 2.

The Atlas Movies Theater has repriced their ticket rates to maximize revenues. They

have three classes of tickets: Classic, Silver, and Gold. The table below provides

information on the average ticket sales, revenue and price elasticity on demand. They

have a total seating capacity of 300. The table also provides the new price for the three

classes obtained using Solver.

Assume the distributions of elasticities for three classes of tickets are uniform with

minimum and maximum values equal to 75% and 125% of their estimated values,

respectively. Under this assumption, use Monte Carlo simulation to see what happens to

the prediction of tickets sold. The model is simulated for 10,000 trials.

Which of the following cells are defined to be uniformly distributed?

A) B6:B8

B) C6:C8

C) D6:D8

D) B13:B15

In a two-sample test for differences in means, the hypotheses are of the form:

Below is the spreadsheet for a project selection model:

What is the return obtained from Project 3?

A) $ 200,000

B) $ 125,000

C) $ 275,000

D) $ 225,000

Which of the following symbols is used to represent exponents in Excel?

A) ^

B) *

C) #

D) !

The details of the clock sales at a supermarket for the past 6 weeks are shown in the

table below. The time series appears to be relatively stable, without trend, seasonal, or

cyclical effects. The simple moving average value of k is set at 2.

For the given data, the simple moving average mean absolute deviation is ________.

A) 0.21

B) 20.12

C) 14.25

D) 207.13

The following table exhibits the age of antique furniture and the corresponding prices.

Use the table to answer the following question(s). (Hint: Use scatter diagram and the

Excel Trendline tool where necessary).

What is the relationship between the age of the furniture and their values?

A) Nonlinear

B) Linear

C) Curvilinear

D) No relationship

Shirley Templeton is a real estate agent for Paralol Realty. Shirley is given the

responsibility to manage potential customers for 5 of the Realty’s bungalows. These 5

bungalows are situated in close proximity. In order to make traveling easier, Shirley

decides to move to a location closer to the 5 bungalows. The table below gives the

location (X and Y coordinates) of the 5 bungalows along with the number of trips she

would have to make to each bungalow. Create a nonlinear model based on the data

given in the table below noting that the objective is to reduce the weighted distance

between Shirley’s accommodation and the 5 bungalows.

According to the model, what is the weighted distance between Shirley’s new

accommodation and Bungalow 1?

A) 589.25

B) 435.89

) 346.77

D) 3152.08

A company makes standard 130- inch-wide rolls of thin sheet metal and slits them into

smaller rolls to meet customer orders for widths of 10, 14, and 25 inches. Suppose that

the company has proposed the following cutting patterns:

Demands for the coming week are 950 10-inch rolls, 725 14-inch roles, and 640

25-inch rolls. Develop a model using the Analytic Solver Platform that will determine

how many 130-inch rolls to cut into each of the six patterns in order to meet demand

and minimize scrap.

What is the total number of 25-inch rolls produced?

A) 630

B) 635

C) 640

D) 645

A(n) ________ is an extreme value that is different from the rest of the data.

A) critical value

B) standard error

C) expected value

D) outlier

A positiveNPVmeansthattheinvestmentwillprovideaddedvaluebecausetheprojected

returnexceedsthe .

A) modified internal rate of return

B) discount rate

C) accounting rate of return

D) adjusted present value