2. Artie Siegel, an MBA student, has been having problems balancing his checkbook. His monthly income...

2. Artie Siegel, an MBA student, has been having problems balancing his checkbook. His monthly income is derived from a graduate research assistantship; however, he also makes extra money in most months by tutoring undergraduates in their quantitative analysis course. His historical chances of various income levels are shown in the following table:

Monthly Income* ($)	Probability
350	0.40
400	0.20
450	0.30
500	0.10

*Assume that this income is received at the beginning of each month.

Siegel’s expenditures also vary from month to month, and he estimates that they will follow this distribution:

Monthly Expenses ($)	Probability
300	0.10
400	0.45
500	0.30
600	0.15

He begins his final year with $600 in his checking account. Simulate the entire year (12 months) on the next page and discuss Siegel’s financial picture, i.e., will he be able to keep his head above water--(out of debt)? What is his expected average profit for the 12 months? Use the random numbers below.

Random numbers for Income and Expenses

Income	85	54	73	95	9	19	81	2	76	55	57	1
Expenses	99	44	1	80	95	72	75	16	32	57	31	32

Expert Solution

orchestra answered 1 year ago

Artie Siegel, an MBA student, has been having problems balancing his checkbook. His monthly income is...

Artie Siegel, an MBA student, has been having problems balancing his checkbook. His monthly income is derived from a graduate research assistantship; however, he also makes extra money in most months by tutoring undergraduates in their quantitative analysis course. His historical chances of various income levels are shown in the following table: Monthly Income* ($) Probability 350 0.40 400 0.20 450 0.30 500 0.10 *Assume that this income is received at the beginning of each month. Siegel’s expenditures also vary...

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Jacob’s monthly income is $2,800 and his monthly expenses total around $2,000. He has been contemplating...

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