Even if individual banks are good at forecasting risk using VAR models there may still be problems because losses may occur at several banks at the same time due to the interdependency of the financial system, magnifying each bank's risk exposure and possibly causing a major problem for regulators. The book calls this:

At a student café, there are equal numbers of two types of customers with the following values. the café owner cannot distinguish between the two types of students because many students without early classes arrive early anyway (i.e., she cannot price-discriminate). students with early classes students without early classes coffee 70 60 banana 51 101 the marginal cost of coffee is 10 and the marginal cost of a banana is 40. the café owner is considering three pricing strategies: 1. mixed bundling: price bundle of coffee and a banana for 161, or just a coffee for 70. 2. price separately: offer coffee at 60, price a banana at 101. 3. bundle only: coffee and a banana for 121. do not offer goods separately. assume that if the price of an item or bundle is no more than exactly equal to a student's willingness to pay, then the student will purchase the item or bundle. for simplicity, assume there is just one student with an early class, and one student without an early class. price strategy revenue from pricing strategy cost from pricing strategy profit from pricing strategy 1. mixed bundling $ $ $ 2. price separately $ $ $ 3. bundle only $ $ $ pricing strategy yields the highest profit for the café owner.

In the united states, one worker can produce 10 tons of steel per day or 20 tons of chemicals per day. in the united kingdom, one worker can produce 5 tons of steel per day or 15 tons of chemicals per day. the united kingdom has a comparative advantage in the production of:

Which is cheaper: eating out or dining in? the mean cost of a flank steak, broccoli, and rice bought at the grocery store is $13.04 (money.msn website, november 7, 2012). a sample of 100 neighborhood restaurants showed a mean price of $12.75 and a standard deviation of $2 for a comparable restaurant meal. a. develop appropriate hypotheses for a test to determine whether the sample data support the conclusion that the mean cost of a restaurant meal is less than fixing a comparable meal at home. b. using the sample from the 100 restaurants, what is the p-value? c. at a = .05, what is your conclusion? d. repeat the preceding hypothesis test using the critical value approach