# MS6000 Final Exam

### Question Description:

Hello, I need Section B and section A’s 5 -10 answered the details are in the document attached thanks : ) EXAM_MS6000.pdf MS6000 Final Exam DETAILS AND INSTRUCTIONS: The final exam consists of 3 sections, A, B and C. Questions 1 – 10 in section A are worth 3 points each, for a total of 30 points. Sections B and C contain problems you need to model in excel and using Solver (Section B) and/ or Macros (Section C). In total, they are each worth 35 points. Please follow these instructions carefully: Your final exam submission should consist of 1 single Excel document. The first tab should contain your answers to all questions in the final exam, where one column corresponds to the question # and the column to the right of it contains your answer. The next two tabs should contain your models for sections B and C, respectively. Your Excel file needs to be named with your name, the course # and the words ‘final exam’ as: lastname_firstname_MS6000_final exam.xlsx. The file needs to be emailed to me as an attachment by 11:59pm May 07, 2016 or you will not receive credit. Good Luck! SECTION A: Multiple Choice and True/False Use the below decision tree illustrating the R&D process for a new drug to answer questions 1 and 2: Provided Dollar amounts in the decision tree are in millions. 1) Which of the following is a decision node? A) whether or not clinical trials are successful C) whether the market is large, medium, or small B) whether or not to seek FDA approval D) whether or not FDA approved 1 2) What is the probability that the drug reaches to a large market? A) 0.054 B) 0.700 C) 0.108 D) 0.018 3) Which of the following best defines payback period? A) It is the number of time periods before the net expenditure exceeds the amount of the initial investment. B) It is the number of time periods before the amount of the initial investment exceeds the cash inflows of a proposed project. C) It is the number of time periods before the cash inflows of a proposed project exceed the amount of the initial investment. D) It is the number of time periods before the cash inflows of a proposed project equal the amount of the initial investment. Use the below payoff table with four mortgage options to answer question 4: 4) Which of the following decisions has the best average payoff? A) 1-year ARM B) 30-year fixed C) 3-year ARM D) 5-year ARM 5) In linear optimization models, an objective function is the . A) unknown value that the model seeks to determine B) limitation or requirement that decision variables must satisfy C) set of values that satisfies all the constraints D) quantity that we seek to minimize or maximize 6) An optimal solution is . A) the limitation or requirement that decision variables must satisfy B) also known as the constraint function C) the quantity that we seek to minimize or maximize D) any set of decision variable values that maximizes or minimizes the objective function 7) The is the difference between the right- and left-hand sides of a constraint. A) shadow price B) slack C) optimal solution 2 D) allowable increase 8) Integer linear optimization models differ from nonlinear optimization models in that integer linear optimization models . A) contain terms that cannot be written as constant times a variable B) contain some or all variables that are restricted to being whole numbers C) use only equalities to describe the constraints D) use only inequalities to describe the constraints 9) What is Monte Carlo simulation? A) It is a ratio of the departure of an estimated parameter from its notional value and its standard error. B) It is a measure of the correlation between two variables X and Y that falls exclusively between the values +1 and -1. C) It is the process of generating random values for uncertain inputs in a model, computing the output variables of interest, and repeating this process for many trials in order to understand the distribution of the output results. D) It is an