ETF5952 Quantitative Methods for Risk Analysis

WEEK 1 Tutorial
GENERAL

• Tutorials lag the lecture material by one week (the Week 2 tutorial relates to the Week 1 lecture
content, and so on). So, it doesn’t matter if your week’s timetable has your tutorial occurring before
your lecture. Tutorial Exercises are in the relevant Weekly section of Moodle.
• It is expected that, before each tutorial, you have completed relevant reading and exercises as
described in the Weekly Schedule. The Tutorial Exercises provide further practice and are indicative
of questions that will appear in the final exam. For calculations in these questions, you should show
relevant formulae and associated working.
• Tutorial exercises are NOT for submission to your teaching fellow; you work on them in class.
• The teaching fellow may not complete all of the assigned questions in the tutorial hour. It will depend
on the level of student preparedness, the number of questions that students ask, etc. If the questions
are not completed in class, you should complete them at home. Detailed solutions to the week’s
Tutorial Exercises will be available in the relevant week’s section of Moodle by 5pm Friday of the
week in which the tutorial was conducted (except Week 1).
• All material specified in the Weekly Schedule is assessable. The Tutorial Exercises are just a part
of your study, which should also include lecture notes, textbook readings and textbook Problems.
• Although most students master the calculations involved in this unit, many students have difficulty
with the interpretative questions. If you are having such difficulty, you should promptly review
your study techniques. The emphasis of this unit is on understanding and solving business problems
and not simply on performing routine computational tasks (done very well by computers
nowadays). You should also consult a teaching fellow - your own class teaching fellow, or one of
the other teaching fellows rostered each week for consultation throughout the semester. See Moodle
for the roster.

This unit of study has a practical orientation. Therefore, you will need to practice the concepts
presented in lectures and tutorials.

Remember that, in the final exam, you will be asked to exhibit your skills in solving problems
(without the solutions being available for you to look at). If you have done few or no Problems
during the semester, you will be VERY POORLY PREPARED for the exam.

(The exam questions WILL NOT just be repeats of the Lecture and Tutorial examples.)

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 WEEK 1 Tutorial Exercises
Introduction, Windows 7, R and RStudio, HP10bII+ calculator, and Word,

You are unlikely to complete all of these tasks in Tutorial 1. (This will depend on your current
knowledge of Microsoft Office.)
However, you should complete these tasks at home because
• you will need many of the skills for typing assignments.
• these skills will be very useful for the rest of your course - and in your working life.
You are welcome to consult a staff member for help. See Moodle for the consultation roster.

Introduction
1. Login immediately (since this can be time consuming) using your Authcate account.
• NB, login usernames and passwords are case sensitive.
• In the computer labs, you can save files in your own 5GB My Documents folder. This
can be accessed from any student PC across Monash.
2. Complete the Roll Form which is circulating in class: ID, Surname, Initials, Preferred Name.
3. Open a browser. Go to my.monash and start Moodle.
Download
• the Unit Guide from the “UNIT GUIDE” section on Moodle.
• Week 01 from the “WEEK 1” section on Moodle.

Microsoft Windows 7
Splitting the screen
Windows (7 and later) enables you to split the screen vertically into 2 displays. For example, you
could have this Word document open on the left side of the screen and an Excel document open on the
right. Thus, you can read the instructions in Word on the left while you carry out the instructions in
Excel on the right. This Windows feature is generally useful – including in tutorials/computer labs.
This splitting is possible for any pairwise combination of Excel, .pdf, Powerpoint, Windows Explorer,
Word, Internet Explorer, etc – including 2 copies of the same application, eg, 2 documents in Word.
• Ensure that this Word document is open on your computer.
• While holding down the “Windows” key , press the “” key (you may need to repeat
this step) until this Word document occupies the left half of the screen.
• Open Excel with a new “Blank workbook”.
Leave this workbook open for later use in this tutorial.
• While holding down the “Windows” key , press the “” key (you may need to repeat this step)
until Excel occupies the right side of the screen.
• To reinstate a full screen display of an application, press at the top right of the screen.

Snipping Tool
Windows (7 and later) enables you to capture (“snip”) almost any image from any screen (eg, Word,
Excel, an internet page, the Desktop) and Paste it into, for example, Word, PowerPoint or Excel.
1. Ensure that the screen is displaying the target image (eg, Word, Excel, an internet page, the
Desktop) from which you want to “snip”.
2. Click on the Windows “Start” button , select “Snipping Tool” and click on “New”.

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3. A faded version of the screen that was displaying in 1. will re-appear. So will a moveable
symbol. Click and drag with this symbol to select the part of the image that you want to “snip”.
4. You can now Paste your “snip” into, for example, Word, PowerPoint or Excel.
Once you have done so, you may wish to tidy the image by “cropping” it. See under “Pasting an
Excel chart into Word (or Powerpoint)”, below.

Windows Calculator
Windows (7 and later) provides an on-screen calculator.
• Click on the Windows “Start” button .
Choose All Programs/Accessories/Calculator
• In the View’ option, choose the ‘Scientific’
calculator.
• Using Edit/Copy, results may be copied into, eg, a
Word or an Excel document.
• Leave this calculator ‘on’ for later use in this
tutorial.

R/Rstudio

1. Install R and RStudio. (This step has been done on Monash Lab Computers).
R software: https://www.r-project.org/
RStudio: https://www.rstudio.com/

2. Open RStudio and take a look at four displays/windows.

3. At the Console window, type the followings and get answers:

a) 3 + 4
b) x = 3
y=4
x+y
c) x^2
d) z = 1 + 2 * (3 + 4)
z

4. Crate a script file to do 3) and run the script.

5. Vector: type the followings:

y = c(1, 2, 3)
y
length(y)

6. Matrix: type the followings:

v = matrix(data=c(1, 2, 3, 4), nrow=2, ncol=2)
v
v[,1]
v[1,]
v[,2]
v[1,2]
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 7. Data Frame:
v1 = c("Tom", "Alice", "Alex")
v2 = c(171, 165, 183)
data = data.frame(v1, v2)
names(data)=c("name", "height")
data
data$height
data$name
names(data)

8. Load a data sets “QuestionnaireData.csv”

1) Go to the right-top display and click import [From text (base)]. Then, choose the file.
2) At the console window, you can see function, read.csv( ). Modify the line to name the data
set as “DATA”
3) Type the followings at the console window:
a) DATA
b) names(DATA)
c) head(DATA)
d) tail(DATA)
e) View(DATA)
f) DATA[,1]
g) DATA[2,]
h) DATA[2,1]
i) summary(DATA)

HP10bII+ calculator
1. On paper, (not electronically), evaluate the following. (Just like in high school.)
1 + 2×3
2. Using the Windows on-screen ‘Scientific’ calculator, evaluate.
1 + 2×3
3. Using Excel, evaluate.
=1 + 2*3 (“ = ” tells Excel that you’re typing a formula; “ * ” for multiply.)
4. Using your phone’s calculator, evaluate.
1 + 2×3
5. Ensure that your HP10bII+ calculator is in its default (Chain) mode.

• Press until “Chain” appears briefly on the screen.

Evaluate 1 + 2×3
Change your HP10bII+ calculator’s mode to its non-default (Algebra).

• Press until “Algebra” appears briefly on the screen.

Evaluate 1 + 2×3
6. Compare your results from 1. to 5. What conclusions do you reach?
The “CALCULATOR” section on Moodle contains a manual – which will occasionally be updated.

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Microsoft Word
Typing mathematical symbols
1. Open Microsoft Word and start a new “Blank document”.
2. From the top of the screen, select “Insert”.
At the right of the “Insert” ribbon, in the “Symbols” group, select “Symbol”. If your desired symbol
does not appear, select “More Symbols” and select the desired font, eg, “Symbol”.
Type each of the following expressions into a new line of Microsoft Word.
(a) x ≤ 9
(b) 12 ±4
(c) Area = πr2 To (de)activate superscripts, use the icon in the “Home” ribbon.
(d) y = x1 + x2 To (de)activate subscripts, use the icon in the “Home” ribbon.
[Or, for subscripts, hold Ctrl and press = ; superscripts Ctrl Shift = ]

Typing more-complex mathematical expressions

We do this by inserting an “Equation”.
1. Go to a new line of your Word document and, from the top of the screen, select “Insert”.
π
2. From the “Symbols” group, at the right of the Word ribbon, select the “ ” symbol on the
“Equation” icon. A Type equation here. box will appear on the line and the following “Design”
ribbon will appear at the top left of the screen.

• The “Symbols” group at the left of the “Design” ribbon provides individual symbols.
At the right edge of the “Symbols” group, click
– to scroll through more symbols and
– to show the “Basic Math” gallery of symbols.
– the downward triangle to show other galleries of symbols, eg, “Arrows”.

• The “Structures” group at the right of the “Design” ribbon provides formats for mathematical
expressions within the equation that you are inserting.
for fractions, eg, x/y
for subscripts and superscripts, eg, x1, x2
for summation expressions

3. Type each of the following expressions into a new line of Word.

(a) 𝑥𝑥 → ∞ Use the “Symbols” group.
𝑥𝑥+5
(b) Use the “Fraction” structure.
𝑦𝑦−8

(c) 𝑥𝑥12 Use the “Script” structure.

−𝑏𝑏±√𝑏𝑏2 −4𝑎𝑎𝑎𝑎
(d) 2𝑎𝑎
Start with the “Fraction” structure.
6 −3
(e) �√2 𝑥𝑥 � Start with the “Matrix” structure.
�1.5
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4. Save your Word file as Tutorial 01.docx. (In a Monash computer lab, save to your own 5GB
Computer/Documents/My Documents folder - accessible from any Monash student PC.)

If you don’t complete all of these tasks in Tutorial 1, you should complete them at home because
• you will need many of the skills for typing your assignments.
• these skills will be very useful skills for the rest of your course and in your working life.

Copyright @ Tatsushi Oka

 Notes on the Faculty-approved HP 10bII+ Financial Calculator
Chain and Algebraic Operating Modes
Definitions
The calculator has two operating modes:
• Chain, which is the default.
• Algebraic, which follows the standard “BODMAS” convention for the order of operations.
For example, the sequence of keystrokes 1+2×3 is interpreted in
• Chain mode as (1+2) × 3 giving the answer 3×3= 9

• Algebraic mode as 1 + (2 × 3) giving the answer 1+6= 7

(This follows the standard “BODMAS” convention for the order of
operations.)

Identifying and changing mode

The calculator has no permanent screen display to indicate which operating mode is current.

• So, to identify the current mode, press

“Chain” or “Algebraic” will appear briefly on the screen, then disappear.

• To change the mode, press

“Chain” or “Algebraic” will appear briefly on the screen, then disappear.

Decimal places
By default, the calculator displays only 2 decimal places.
• To change this, press followed by, for example 6, for 6 decimal places.
• For a convenient display, of up to the maximum number of digits, press , followed
by the decimal point key.

Resetting the calculator

Sometimes the calculator will lock up or will not respond correctly.
• It can be reset by inserting a thin object, eg a paperclip, into the “RESET” hole in the battery
compartment at the back of the calculator.
NB: the calculator then reverts to its default settings (including Chain mode) and all memories are
erased.

Copyright @ Tatsushi Oka