Can someone help me to solve problem 1113 below please ign

Can someone help me to solve problem 11.13 below ? ( please ignore the top portion above 11.13 , i took a wrong screenshot) . Thanks for your time in helping me to solve this problem

(You will have to calculate the standard deviations from all three models.) How do the standard deviations from the ES-M model com pare to those from the EP-T and simulation models? Repeat problem 11.11, but using the EP-T approximation with 781 as the 95th per centile instead of 780 as we did in the text. How much difference is there between the results using 780 versus 781? 11.13. Your boss has asked you to work up a simulation model to examine the uncertainty regarding the success or failure of five different invest- ment projects. He provides probabilities for the success of each project individually: p,-0.50, p,-0.35, p,-0.65, p,-0.58, p,-0.45. Because the projects are run by different people in different segments of the investment market, you both agree that it is reasonable to believe that, given these probabilities, the outcomes of the projects are independent. He points out, however, that he really is not fully confi dent in these probabilities and that he could be off by as much as 0.10 in either direction on any given probability. a. How can you incorporate his uncertainty about the probabilities into your simulation? Now suppose he says that if he is optimistic about the success of one project, he is likely to be optimistic about the others as well. For your simulation, this means that if one of the probabilities increases, the others also are likely to increase. How might you incorporate this information into your simulation? b.

Solution

Through partial differential equations, the uncertainty can be incorported into simulation models. There are various phases, which includes how boss has conceptualized the project that is success/failures of five different investment projects; mathematical modelling of the project followed by algorithm selection, discretization of algorithm of the prescribed model and solving it throgh computer programming.