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Financial Engineering Aptitude Test
FEAT 10

Team Latte
Dec 26, 2005

 Problem 1

If 9 + 9 = 100 and 77 + 2 = 234 then what is the value of 12 + 11 + 313 = ?

(a) 551
(b) 48984
(c) 895
(d) 119528

Problem 2

Your friend holds a coin in his one of his palms and asks you what the probability is of the coin being in the right palm. You answer 50%. Your friend disagrees and says it is 100%.

Please comment on the above.

Problem 3

A contract with a notional value of $100 pays to the holder of the contract:

or

Where the variable is the indexed value of real estate price in Mumbai , India and is a predetermined value (constant) of the variable.

(a) What will be the change in the value of the contract with respect to
      after a period of time if the value of is less than that of by a factor of 3 ?
(b) The contract is both convex and concave. Explain.  

Problem 4

The following differential equation:

(a) will have two values;
(b) a single value;
(c) will have three values;
(d) None of the above;

Problem 5

In not more than 100 words, describe what is the role of a financial engineer and how it is different from that of a mechanical engineer? ______________________

 

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