A customer needs a specific amount of paper. The charges on the paper are $0.10 for single sheets,$0.055 for amounts in multiples of 100 sheets, $0.04 in multiples of 500 sheets, and $0.03 in multiplesof 1000 sheets. Develop a solution to calculate the type and number of package(s) for the least amountof money the customer should buy, given the minimum amount of sheets the customer needs. Forexample, if the customer needs 380 sheets, the amount she would pay when buying in multiples of 100would be $22.00. However, if the customer bought 500 sheets, the cost would be $20.00. It would becost effective for the customer to buy a package of 500 sheets.
Compute the risk premium as π = E(x) – C where A(W)= -U’’(W)/U’(W) is the absolute measure of risk aversion of the investor. 1c) Show how the risk premium varies as the parameter c changes.Compute the risk premium as π = E(x) – C and verify the approximation= 1 2 where A(W)= -U’’(W)/U’(W) is the absolute measure of risk aversion of the investor. 1c) Show how the risk premium varies as the parameter c changes.
November 14, 2015
12:25 pm
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