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

Linear programming, Chelsea has been facing some financial problems which e...

Chelsea has been facing some financial problems which even caused her daily expenses for food, at the same time, she hasn''t receive the money from the bank loan yet. Therefore, sh

Promote products and services, please let us know above promote products an...

please let us know above promote products and services..i gave the assignment from my collage

Evaluate the subsequent inverse trigonometric functions, Evaluate the subse...

Evaluate the subsequent inverse trigonometric functions: Evaluate the subsequent inverse trigonometric functions. arcsin   0.3746 22° arccos  0.3746 69° arctan  0.383

Differences of squares and other even powers, Differences of Squares (and o...

Differences of Squares (and other even powers) ? A square monomial is a monomial which is the square of another monomial. Here are some examples: 25 is the square of 5 x 2 i

PR Plan for Bloomington Bombers softball team, I need to come up with a PR ...

I need to come up with a PR plan for a fictitious women''s softball team. How much would something like that cost?

Linear programming, how i do project in linear programming in agriculture

how i do project in linear programming in agriculture

Solving equations, darien agrees to sponsor her sister $8 plus $1 for every...

darien agrees to sponsor her sister $8 plus $1 for every mile she walks.Write an expression to show her total money

Business mathematics, explain how business mathematics in an inbu;it compo...

explain how business mathematics in an inbu;it component of a payroll package

How to make equations of conics easier to read, How to Make Equations of Co...

How to Make Equations of Conics Easier to Read ? If you want to graph a conic sections, first you need to make the equation easy to read. For example, say you have the equatio

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