ACCOUNTING AND FINANCIAL ENGINEERING - EXAMPLE 34.20 : Assume an engineer buys a $1 bond in period T while the nominal interest rate is R. The inflation rate at T + 1 is anticipated to be I. (a) If the bond is redeemed in period T + 1, how much money will the buyer engineer receive, in term of R, which is not affected by inflation? (b) Find the present value, PV of the proceeds from the bond, in term of R and I. (c) If the bond is redeemed in period T + 1, calculate the real growth or real value of the money that the buyer engineer will receive, in term of r = real interest rate, which is affected by inflation. (d) From the answers in (b) and (c), find the values of x, y and z in the following Fisher equation : (1 + x) = (1 + y) / (1 + z), in term of r, R and I.
ACCOUNTING AND FINANCIAL ENGINEERING - ANSWER 34.20 : (a) Money received without inflation = $(1 + R). (b) PV = $ [ (1 + R) / (1 + I) ]. (c) Money received with inflation = $(1 + r). (d) Answer in (b) = (c) = $ [ (1 + R) / (1 + I) ] = $(1 + r); then x = r, y = R, z = I. The answer is given by Kang Chuen Tat; PO Box 6263, Dandenong, Victoria VIC 3175, Australia; SMS +61405421706; chuentat@hotmail.com; http://kangchuentat.wordpress.com.
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Question 33 – By using Excel program either on laptop or desktop PC, solve the differential equation dy / dx = -2y + x + 4 with h = 0.005, initial values : x = 0, y = 1. The 4th order Runge-Kutta method provides : y(N + 1) = y(N) + (1/6) (k1 + 2k2 +2k3 + k4), k1 = h [ -2y(N) + x(N) + 4 ], k2 = h { -2 [ y(N) + k1 / 2 ] + x(N) + h / 2 + 4 }, k3 = h { -2 [ y(N) + k2 / 2 ] + x(N) + h / 2 + 4 }, k4 = h { -2 [ y(N) + k3 ] + x(N) + h + 4 }. What is the value of y at x = 0.5?
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ENGINEERING MATHEMATICS - EXAMPLE 8.2 : In the US (United States), one barrel is equal to 42 US gallons and equivalent to 0.15898 cubic metres. One British barrel is equal to 36 Imperial gallons and equivalent to 0.163659 cubic metres. If an oil refinery in England sells 42 Imperial gallons of crude oil to a company in US, how much US gallons of crude oils has been sold?
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ACCOUNTING AND FINANCIAL ENGINEERING - EXAMPLE 34.6 : In a random walk, a stochastic process starts off with a score of A. This is a score for a chemical engineering test. At each discrete event, there is probability p chance you will increase your score by B and a (1 - p) chance you will decrease your score by C. The event happens T times. Let D = expected value of score. (a) Form an equation of D as a function of A, B, C, T and p. (b) Find the value of D if A = 60, B = 1, C = -1, T = 50, p = 0.5.
QUANTUM COMPUTING - EXAMPLE 32.2 : (a) If | 001 > = | 1 >, | 111 > = | 7 >, find the 2 possible values of ( | 001 > + | 1 > + | 7 > ) ( | 111 > ). (b) In quantum money, a duplicate will have probability P of passing the verification test of a bank, if the total number of photons on the bank note is N. The would be counterfeiter has a probability p of success in duplicating the quantum money correctly for each photon. Guess the relationship of P, p and N as a mathematical formula involving natural logarithm ln.
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