Final Flashcards
(14 cards)
1
Q
formula PV
A
PV = FV/(1+r)^n
2
Q
formula NPV
A
NPV = -Ci + Cn / (1+r)^n
3
Q
Utility Function formula
A
U(x) = 1 - e ^-x/R
4
Q
4 Steps in risk utility problems
A
- Find EU
- Find CE
- Find EMV
- Find Risk premium
5
Q
EU formula
A
prob. x U($) + ..
6
Q
CE formula
A
U(answer to EU)
7
Q
EMV
A
prob. x $
8
Q
Risk premium
A
EMV - CE = RP
9
Q
regression equation
A
coefficients intercept + coefficients (time) x
10
Q
interpret the coefficient of …
A
shows how much (second variable) increases as (…) increases
11
Q
what is the 95% confidence interval
A
look at upper and lower confidence for that variable, 95% of the estimated coefficients fall within this range
12
Q
Find the correlation coefficient between x and y
A
multiple r
13
Q
find the coefficient of determination
A
r squared
14
Q
cost of benefit
A
cost1-cost2 / score1-score2
