代做ECON5026 Mid semester test Practice questions Part B代写留学生Matlab语言

ECON5026 Mid semester test

Practice questions Part B

Sample Descriptive questions

Suppose you have been investing in a bundle of selected stocks (Y). You are aware of your expected

returns [E(Y)] and investment volatility measured by standard deviation (σ) such that E(y) =

$1000 + σ . For any given value of σ  = $500, explain your certainty equivalent and risk premium? (Use an appropriate fully labelled diagram in your answer).                                                  [6 Marks]

Consider that a firm embarks on a month-long sales campaign with flexible pricing options for LED televisions and sound systems. There are four customers with valuations for each of these products as indicated in the table below:

Customer	LED Televisions	Sound System
Wang	1300	500
John	1000	1000
Khan	500	1200
Jessica	1600	1000

The marginal and average cost of making a LED television is $900, and the marginal and average cost of making a sound system is $600.

Explain the optimal pricing strategy of the firm if:

(i) there is no budling

(ii) bundling of the two products

(iii)  a mix or optional bundling.

How much profit will the company make in each case?  (Show your work detail.)

[7 Marks]