x

0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
2.50
2.75
3.00

U(x), r=-0.5
0.00
0.26
0.55
0.87
1.23
1.62
2.06
2.53
3.06
3.65
4.30
5.01
5.80

U(x),r0
0.00
0.25
0.50
0.75
1.00
1.25
1.50
1.75
2.00
2.25
2.50
2.75
3.00

U(x), r=0.5
0.00
0.24
0.45
0.65
0.82
0.98
1.13
1.26
1.38
1.48
1.58
1.67
1.75

r
0.005
v=

p
0.2
825.51066089

n
30

a
100

A's Bid

c
50

A's Actual Profit in Crores of Rupees

B's Bid
3.0
3.1
3.2
3.3

Probability
If Won

2.9

2.9

1.0

-0.1

-0.1

-0.1

-0.1

-0.1

3.0

0.8

3.1

0.6

0.1

0.1

0.1

3.2

0.4

0.2

0.2

3.3

0.2

0.3

7.00
6.00
5.00
4.00

U(x), r=-0.
U(x),r0

3.00

U(x), r=0.5

2.00
1.00
0.00
0.00

0.50

1.00

1.50

2.00

ees
Profit
if Won

Expected
Profit

RAP

-0.1

-0.1

-0.1

0.1

0.06

0.0476863 -(0.1)*ln(0.6e-1+0.4e0)

0.2

0.08

0.0424443 -(0.1)*ln(0.4e-2+0.6e0)

0.3

0.06

0.0210774 -(0.1)*ln(0.2e-3+0.8e0)

-(0.1)*ln(e1)
-(0.1)*ln(0.8e0+0.2e0)

2.50

3.00

3.50

U(x), r=-0.5
U(x),r0
U(x), r=0.5

3.50

Portfolio Selection Problem

Mean
Var

C
I
r

c1

c2

24000
0.068
0.0009
0.25
5000
0.04
0.001

26000
0.056
0.0004

50000
1088
409.37600000
678.62400000

50000

24000

2.48
0.775

V B 0.1 ln 2.5 B 2.9 e 10 B3 3.3 B

3.10737

B-2.9
e-10(B-3)
3.3-B
0.207373 0.341731844 0.192627 0.065826816

3.3 B

0.68

V(B)
0.0381261482
0.4815677672

B-3
0.107373 485165195.41

c1

c2

31111.11292 39999.99399
0.5
71111.10691
Mean
0.028
0.016
1511.111066
Variance
0.0009
0.0004
1511111.02
Covariance
0.0006
746666.5979 755.5555553

0.5
-0.5

c1
c2
31111.11292 39999.99399
31111.11275 39999.99385

250000

7911.111279