Find the maximum expected holdings, Mathematics

Assignment Help:

Problem:

A person has 3 units of money available for investment in a business opportunity that matures in 1 year. The opportunity is risky in that the return is either double or nothing. Based on past performance, the likelihood of doubling one's money is 0.6, while the chance of losing an investment is 0.4. Money earned one year can be reinvested in a later year and investments are restricted to unit amounts.

When dynamic programming is used to find the investment strategy for the next 4 years that will maximize the expected total holdings at the end of that period, the problem is formulated as a four-stage process with each stage representing a year. The states sj are the amounts of money available for investment for stage j (j = 1; 2; 3; 4).

Let fj(sj) denote the maximum expected holdings at the end of the process, starting in state sj at stage j.

(a) By clearly explaining your reasoning show that a recursive formula for finding the maximum expected holdings at the end of four years is given by

2018_Find the maximum expected holdings at the end of the four years.png

for j = 1; 2; 3 and 4, where the values of α and β are to be determined.

(b) Write down an expression for f5(s).

(c) Find the maximum expected holdings at the end of the four years.


Related Discussions:- Find the maximum expected holdings

Minima, Minima, Maxima and points of inflexion a)      Test for rela...

Minima, Maxima and points of inflexion a)      Test for relative maximum Consider the given function of x whose graph is presented by the figure given below

Point, what will be the activity of the above said title

what will be the activity of the above said title

Estimate weight if telephone pole weighs 11.5 pounds foot, If a telephone p...

If a telephone pole weighs 11.5 pounds per foot, how much does a 32-foot pole weigh? Multiply 11.5 by 32; 11.5 × 32 = 368 pounds.

Vector calculus, If F ( x,y, z) = x y² y4 i + ( 2x2 y + z) j - y3 z² k, fin...

If F ( x,y, z) = x y² y4 i + ( 2x2 y + z) j - y3 z² k, find: i). question #Minimum 100 words accepted#

Calculate the width of the river, A surveyor is hired to calculate the widt...

A surveyor is hired to calculate the width of a river. Using the example provided, Calculate the width of the river. a. 48 ft b. 8 ft c. 35 ft d. 75 ft

Math, how to compare fractions

how to compare fractions

Solving equations and/or word problems for the unknowns, With their fence i...

With their fence in place, Zack and Clint set to work landscaping yards. Since Clint did the majority of the actual landscaping and planting, he worked on the average more hours t

Solve the radical form, Simplify following. Suppose that x, y, & z are posi...

Simplify following. Suppose that x, y, & z are positive.                      √ y 7 Solution In this case the exponent (7) is larger than the index (2) and thus the fir

Find the volume and surface area of the double cone formed, A right triangl...

A right triangle whose sides are 15 cm and 20 cm is made to revolve about its hypotenuse. Find the volume and surface area of the double cone so formed. (Ans : 3768cu.cm,1318.8

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd