Week 17 Flashcards
1
Q
How to show function is convex?
A
Second Derivative Matrix (with partial derivatives)
If both principal minors are positive
So any local minimum is global minimum
2
Q
When is Langragian method not suitable?
A
-If the optimal satisfies the constraint
-Therefore is an intetrior point
3
Q
Annual rate of interest?
A
P(1+r)^t
4
Q
Quarterly rate of interest?
A
P(1+r/4)^4t
5
Q
Continual rate of interest?
A
Pe^rt
6
Q
A
