Mathematics for Business and Economics - Exam Points

Exam date: February 13, 2019 1

Enrolment Year
Non-graphic calculator and one A4 sheet with formulas and other • full-time 2
content are allowed. Time: 90 minutes. Good luck! • part-time
Name and surname 3
Student ID
4

A
Problem 1 (15 points)
We have a fair coin and a jar with 3 white and 2 red balls. First, we toss the coin.
If it shows the head, we draw 2 balls from the jar (simultaneously), and if it shows
the tail, we draw 3 balls from the jar (simultaneously). The random variable X is the
number of red balls drawn. Find the probability function and the expected value of
the random variable X.

Solution:

We are dealing with a two-phase experiment.

In the first phase we have two possible events (hypotheses):
H1 – the coin shows the head,
H2 – the coin shows the tail.
Both have probability P(H1 ) = P(H2 ) = 12 .
In the second phase we draw the balls.
There are just 2 red balls in the jar, so at most 2 red balls can be drawn.
The possible values for the random variable X are 0, 1, and 2.
Using the total probability formula we find:

P(X = 0) = P(X = 0|H1 )P(H1 ) + P(X = 0|H2 )P(H2 ) =

3
2
3
2

2 0
1 3 0
1 3 1 1 1 1
= 5
· + 5
· = · + · = ,
2 2 10 2 10 2 5
2 3
P(X = 1) = P(X = 1|H1 )P(H1 ) + P(X = 1|H2 )P(H2 ) =
3
2
3
2

1 1 6 1 6 1 3
1 1
= 5
· + 2 5
1 · = · + · = ,
2 2 10 2 10 2 5
2 3
P(X = 2) = P(X = 2|H1 )P(H1 ) + P(X = 2|H2 )P(H2 ) =
3
2
3
2

0 2
1 1 1 1 3 1 1
= 5
· + 1 5
2 · = · + · = .
2 2 10 2 10 2 5
2 3

The probability function of the random variable X is

 
0 1 2
X: 1 3 1 .
5 5 5

The expected value of the random variable X is

1 3 1
E(X) = 0 · 5
+1· 5
+2· 5
= 1.
Problem 2 (20 points)
Consider the function
ƒ () = ln(2 − 4 + 4).
Find its domain, initial value, zeros, poles, the first and the second derivative,
extrema, intervals where it is increasing or decreasing, and intervals where it is
convex or concave. What happens to the function value as  → ∞ and as  → −∞?
Sketch its graph.

Solution:

Domain: The logarithm is defined when 2 − 4 + 4 = ( − 2)2 > 0 ⇔  6= 2.

The domain is R \ {2}.
Initial value: ƒ (0) = ln 4 ≈ 1.39.
Zeros: ln(2 − 4 + 4) = 0 ⇔ 2 − 4 + 4 = 1 ⇔ 2 − 4 + 3 = ( − 1)( − 3) = 0 ⇒
1 = 1, 2 = 3.
Poles: 2 − 4 + 4 = 0 ⇒ 3 = 2 (even multiplicity).
Derivatives:
2 − 4 2 2
ƒ 0 () = = , ƒ 00 () = − .
2 − 4 + 4 −2 ( − 2)2
2
Extrema: The equation ƒ 0 () = −2
= 0 has no solutions, there is no extrema.
The interval, where the function is increasing (2, ∞).
The interval, where the function is decreasing (−∞, 2).
The intervals, where the function is concave (−∞, 2) and (2, ∞).
The function is never convex.
Limits:

lim ƒ () = ∞ lim ƒ () = ∞

→∞ →−∞

-1 1 2 3 4 5

-1

-2
Problem 3 (20 points)
Find all solutions of the system of linear equations, depending on the parameter 

−2 − 2y + z + t = 1
 + 2y + z − t = 1
4 + 6y + z + t = 1

Solution:
   
−2 −2 1 1 1 1 2 1 −1 1
 1 2 1 −1 1 ∼ −2
  −2 1 1 1  ∼
4 6 1  1 4 6 1  1
   
1 2 1 −1 1 1 2 1 −1 1
∼ 0 2 3 −1 3 ∼ 0 2 3 −1 3 
0 −2 −3  + 4 −3 0 0 0 +3 0
The rank of the matrix of the system depends on the parameter .

ˆ If  = −3, the rank of the matrix of the system equals 2, the rank of the
augmented matrix also equals 2, so the system is solvable. It has 4 unknowns,
so the solution is two-parametric. The free unknowns are those without pivots
in their columns, i.e. z and t.
     
1 2 1 −1 1 1 2 1 −1 1 1 0 −2 0 −2
 0 2 3 −1 3  ∼  0 1 3 − 1 3  ∼  0 1 3 − 1 3 
2 2 2 2 2 2
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

3
Solutions: z, t ∈ R,  = 2z − 2, y = 2
− 23 z + 12 t.

ˆ If  6= −3, the rank of the matrix of the system equals 3, the rank of the
augmented matrix also equals 3, so the system is solvable. The solution is
one-parametric, the free unknown is z.
   
1 2 1 −1 1 1 2 1 −1 1
 0 2 3 −1 3  ∼  0 1 32 − 21 32  ∼
0 0 0 +3 0 0 0 0 1 0
   
1 2 1 0 1 1 0 −2 0 −2
∼  0 1 32 0 32  ∼  0 1 32 0 32 
0 0 0 1 0 0 0 0 1 0
3
Solutions: z ∈ R,  = 2z − 2, y = 2
− 32 z, t = 0.
Problem 4 (15 points)
First, we make a deposit of  at the end of each quarter during the first seven years.
Later, we receive an annuity of e500 at the beginning of each half year for another
seven years, but the first annuity is due at the beginning of the tenth year. Find  if
the bank uses the conform monthly compounding and 2.4 % yearly interest rate.

Solution:
Ç
p p
12
The monthly interest factor is r = 12 1 + 100 = 1.024.
The deposit is , the annuity is  = e500.
The cash flow diagram:



1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 years

             

The moment of valuation is the end of the 16th year.

By the equivalence of cash flows we have:

r 189 + r 186 + ... + r 111 + r 108 = r 84 + r 78 + ... + r 12 + r 6

r 108 (r 81 + r 78 + ... + r 3 + 1) = r 6 (r 78 + r 72 + ... + r 6 + 1)

108
r 84 − 1 6
r 84 − 1
r · = r ·
r3 − 1 r6 − 1
r (r 3 − 1)
6 1
=· =  · 102 3
r 108 (r 6 − 1) r (r + 1)
1
 = 500 · p 102 12p 3
= e203.75.
12
1.024 ( 1.024 + 1)

The deposits are e203.75.

Remark: Since all cash flows are made quarterly/semiannually, we can use the
quarterly interest factor R = r 3 and count quarters.
Mathematics for Business and Economics - Exam Points
Exam date: February 13, 2019 1
Enrolment Year
Non-graphic calculator and one A4 sheet with formulas and other • full-time 2
content are allowed. Time: 90 minutes. Good luck! • part-time
Name and surname 3
Student ID
4

B
Problem 1 (15 points)
We have a fair coin and a jar with 3 red and 2 white balls. First, we toss the coin.
If it shows the head, we draw 3 balls from the jar (simultaneously), and if it shows
the tail, we draw 2 balls from the jar (simultaneously). The random variable X is the
number of white balls drawn. Find the probability function and the expected value
of the random variable X.

Solution:

We are dealing with a two-phase experiment.

In the first phase we have two possible events (hypotheses):
H1 – the coin shows the head,
H2 – the coin shows the tail.
Both have probability P(H1 ) = P(H2 ) = 12 .
In the second phase we draw the balls.
There are just 2 white balls in the jar, so at most 2 white balls can be drawn.
The possible values for the random variable X are 0, 1, and 2.
Using the total probability formula we find:

P(X = 0) = P(X = 0|H1 )P(H1 ) + P(X = 0|H2 )P(H2 ) =

3
2
3
2

3 0
1 2 0
1 1 1 3 1 1
= 5
· + 5
· = · + · = ,
2 2 10 2 10 2 5
3 2
P(X = 1) = P(X = 1|H1 )P(H1 ) + P(X = 1|H2 )P(H2 ) =
3
2
3
2

1 1 6 1 6 1 3
2 1
= 5
· + 1 5
1 · = · + · = ,
2 2 10 2 10 2 5
3 2
P(X = 2) = P(X = 2|H1 )P(H1 ) + P(X = 2|H2 )P(H2 ) =
3
2
3
2

1 0 2
1 3 1 1 1 1
= 1 5
2 · + 5
· = · + · = .
2 2 10 2 10 2 5
3 2

The probability function of the random variable X is

 
0 1 2
X: 1 3 1 .
5 5 5

The expected value of the random variable X is

1 3 1
E(X) = 0 · 5
+1· 5
+2· 5
= 1.
Problem 2 (20 points)
Consider the function
ƒ () = ln(2 + 6 + 9).
Find its domain, initial value, zeros, poles, the first and the second derivative,
extrema, intervals where it is increasing or decreasing, and intervals where it is
convex or concave. What happens to the function value as  → ∞ and as  → −∞?
Sketch its graph.

Solution:

Domain: The logarithm is defined when 2 + 6 + 9 = ( + 3)2 > 0 ⇔  6= −3.

The domain is R \ {−3}.
Initial value: ƒ (0) = ln 9 ≈ 2.20.
Zeros: ln(2 + 6 + 9) = 0 ⇔ 2 + 6 + 9 = 1 ⇔ 2 + 6 + 8 = ( + 2)( + 4) = 0 ⇒
1 = −2, 2 = −4.
Poles: 2 + 6 + 9 = 0 ⇒ 3 = −3 (even multiplicity).
Derivatives:
2 + 6 2 2
ƒ 0 () = = , ƒ 00 () = − .
2 + 6 + 9 +3 ( + 3)2
2
Extrema: The equation ƒ 0 () = +3
= 0 has no solutions, there is no extrema.
The interval, where the function is increasing (−3, ∞).
The interval, where the function is decreasing (−∞, −3).
The intervals, where the function is concave (−∞, −3) and (−3, ∞).
The function is never convex.
Limits:

lim ƒ () = ∞ lim ƒ () = ∞

→∞ →−∞

-6 -5 -4 -3 -2 -1

-1

-2
Problem 3 (20 points)
Find all solutions of the system of linear equations, depending on the parameter b

4 + y + 6z − t = 1
 + y + 2z − t = 1
−2 + y − 2z + bt = 1

Solution:
   
4 1 6 −1 1 1 1 2 −1 1
 1 1 2 −1 1  ∼  4 1 6 −1 1  ∼
−2 1 −2 b 1 −2 1 −2 b 1
   
1 1 2 −1 1 1 1 2 −1 1
∼  0 −3 −2 3 −3  ∼  0 −3 −2 3 −3  ∼
0 3 2 b−2 3 0 0 0 b+1 0
The rank of the matrix of the system depends on the parameter b.

ˆ If b = −1, the rank of the matrix of the system equals 2, the rank of the
augmented matrix also equals 2, so the system is solvable. It has 4 unknowns,
so the solution is two-parametric. The free unknowns are those without pivots
in their columns, i.e. z and t.

1 0 43 0 0
     
1 1 2 −1 1 1 1 2 −1 1
 0 −3 −2 3 −3  ∼  0 1 2 −1 1  ∼  0 1 2 −1 1 
3 3
0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Solutions: z, t ∈ R,  = − 34 z, y = 1 − 23 z + t.

ˆ If b 6= −1, the rank of the matrix of the system equals 3, the rank of the
augmented matrix also equals 3, so the system is solvable. The solution is
one-parametric, the free unknown is z.
   
1 1 2 −1 1 1 1 2 −1 1
 0 −3 −2 3 −3  ∼  0 1 23 −1 1  ∼
0 0 0 b+1 0 0 0 0 1 0

1 0 43 0 0
   
1 1 2 0 1
∼  0 1 23 0 1  ∼  0 1 2 0 1 
3
0 0 0 1 0 0 0 0 1 0

Solutions: z ∈ R,  = − 43 z, y = 1 − 23 z, t = 0.
Problem 4 (15 points)
First, we make a deposit of  at the end of each half year during the first six years.
Later, we receive an annuity of e600 at the beginning of each quarter for another
six years, but the first annuity is due at the beginning of the tenth year. Find  if
the bank uses the conform monthly compounding and 3.6 % yearly interest rate.

Solution:
Ç
p p
12
The monthly interest factor is r = 12 1 + 100 = 1.036.
The deposit is , the annuity equals  = e600.
The cash flows diagram:

           

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 years



The moment of valuation is at the end of the 15th year.

By the equivalence of cash flows we have:

r 174 + r 168 + ... + r 114 + r 108 = r 72 + r 69 + ... + r 6 + r 3

r 108 (r 66 + r 60 + ... + r 6 + 1) = r 3 (r 69 + r 66 + ... + r 3 + 1)

108
r 72 − 1 3
r 72 − 1
r · = r · 3
r6 − 1 r −1
r 3 (r 6 − 1) r3 + 1
 =  · 108 3 =  · 105
r (r − 1) r
p
12 3
1.036 + 1
 = 600 · p 105
= e884.52.
12
1.036
The deposits are e884.52.

Remark: Since all cash flows are made quarterly/semiannually, we can use the
quarterly interest factor R = r 3 and count quarters.