2011年山东高考德语试题及答案

1. Differentiate the following terms/concepts:a.Prospect and probability distributionA prospect is a lottery or series of wealth outcomes, each of which is associated with a probability, whereas a probability distribution defines the likelihood of possible outcomes.b.Risk and uncertaintyRisk is measurable using probability, but uncertainty is not. Uncertainty is when probabilities can’t be assigned or the possible outcomes are unclear.c.Utility function and expected utilityA utility function, denoted as u( ), assigns numbers to possible outcomes so that preferred choices receive higher numbers. Utility can be thought of as the satisfaction received from a particular outcome.d.Risk aversion, risk seeking, and risk neutralityRisk aversion describes someone who prefers the expected value of a lottery to the lottery itself. Risk seeking describes someone who prefers a lottery to the expected value of a lottery. And risk neutrality describes someone whose utility of the expected value of a lottery is equal to the expected utility of the lottery.2. When eating out, Rory prefers spaghetti over a hamburger. Last night she had a choice of spaghetti and macaroni and cheese and decided on the spaghetti again. The night before, Rory had a choice between spaghetti, pizza, and a hamburger and this time she had pizza. Then, today she chose macaroni and cheese over a hamburger. Does her selection today indicate that Rory’s choices are consistent with economic rati onality? Why or why not?Rory’s preferences are consistent with rationality. They are complete and transitive. We see that her preference ordering is:Pizza spaghetti macaroni and cheese hamburger3. Consider a person with the following utility function over wealth: u(w) = e w, where e is the exponential function (approximately equal to 2.7183) and w = wealth in hundreds of thousands of dollars. Suppose that this person has a 40% chance of wealth of $50,000 and a 60% chance of wealth of $1,000,000 as summarized by P(0.40, $50,000, $1,000,000).a. What is the expected value of wealth?E(w) = .4 * .5 + .6 * 10 = 6.2U(P) = .4e0.50 + .6e10 = 13,216.54b. Construct a graph of this utility function.The function is convex.c. Is this person risk averse, risk neutral, or a risk seeker?Risk seeker because graph is convex.d. What is this person’s certainty equivalent for the prospect?e w = 13,216.54 gives w = 9.4892244 or $948,922.444. An individual has the following utility function: u(w) = w.5 where w = wealth.a. Using expected utility, order the following prospects in terms of preference,from the most to the least preferred:P1(.8, 1,000, 600)P2(.7, 1,200, 600)P3(.5, 2,000, 300)Ranking: P2, P3, P1 with expected utilities 31.5972, 31.0209, and 30.1972 for prospects 2, 3, and 1, respectivelyb. What is the certainty equivalent for prospect P2?998.3830c. Without doing any calculations, would the certainty equivalent for prospect P1be larger or smaller? Why?The certainty equivalent for P1 would be smaller because P2 is ranked higher than P1.5. Consider two prospects:Problem 1: Choose betweenProspect A: $2,500 with probability .33,$2,400 with probability .66,Zero with probability .01.And Prospect B: $2,400 with certainty.Problem 2: Choose betweenProspect C: $2,500 with probability .33,Zero with probability .67.And Prospect D: $2,400 with probability .34,Zero with probability .66.It has been shown by Daniel Kahneman and Amos Tversky (1979, “Prospect theory: An analysis of decision under risk,” Econometrica 47(2), 263-291) that more people choose B when presented with problem 1 and when presented with problem 2, most people choose C. These choices violate expected utility theory. Why?This is an example of the Allais paradox. The first choice suggests thatu(2,400) > .33u(2,500) + .66u(2,400) or .34u(2,400) > .33 u(2,500)while the second choice suggests just the opposite inequality.1. Differentiate the following terms/concepts:a. Systematic and nonsystematic riskNondiversifiable or systematic risk is risk that is common to all risky assets in the system and cannot be diversified. Diversifiable or unsystematic risk is specific to the asset in question and can be diversified.b. Beta and standard deviationBeta is the CAPM’s measure of risk. It takes into account an asset’s sensitivity to the market and only measures systematic, nondiversifiable risk. The standard deviation is a measure of dispersion that includes both diversifiable and nondiversifiable risks.c. Direct and indirect agency costsAgency costs arise when managers’ incentives are not consistent with maximizing the va lue of the firm. Direct costs include expenditures that benefit the manager but not the firm, such as purchasing a luxury jet for travel. Other direct costs result from the need to monitor managers, including the cost of hiring outside auditors. Indirect costs are more difficult to measure and result from lost opportunities.d. Weak, semi-strong, and strong form market efficiencyWith weak form market efficiency prices reflect all the information contained in historical returns. With semi-strong form market efficiency prices reflect all publicly available information. With strong form market efficiency prices reflect information that is not publicly available, such as insiders’ information.2. A stock has a beta of 1.2 and the standard deviation of its returns is 25%. The market risk premium is 5% and the risk-free rate is 4%.a. What is the expected return for the stock?E(R) = .04 + 1.2(.05) = .10b. What are the expected return and standard deviation for a portfolio that isequally invested in the stock and the risk-free asset?E(R p) = .5(.10) +.5(.04) = .07, σp =(.5)(.25) = .125c. A financial analyst forecasts a return of 12% for the stock. Would you buy it?Why or why not?If you believe the source is very credible, buy it as it is expected to generate a positive abnormal (or excess) return.3. What is the joint hypothesis problem? Why is it important?If when testing one hypothesis another must be assumed to hold, a joint-hypothesis problem arises. For us, this is of particular interest when we are testing market efficiency because of the need to utilize a particular risk-adjustment model to produce required returns, that is, to risk-adjust. This would not be a problem if we knew with certainty what the correct risk adjustment model is, but unfortunately we do not. If a test rejects the EMH, is it because the EMH does not hold, or because we did not properly measure abnormal returns? We simply do not know for certain the answer to this question.4. Warren Buffett has been a very successful investor. In 2008 Luisa Kroll reported that Buffett topped Forbes Magazine’s list of the world’s richest people with a fortune estimated to be worth $62 billion (March 5, 2008, "The world's billionaires," Forbes). Does this invalidate the EMH?Warren Buffett’s experience does n ot necessarily invalidate the EMH. There is the possibility that he is just lucky: given that there are numerous money managers, some are bound to perform well just by luck. Still many would question this here because Buffett’s track record has been consistently strong.5. You are considering whether to invest in two stocks, Stock A and Stock B. Stock A hasa beta of 1.15 and the standard deviation of its returns has been estimated to be 0.28. For Stock B, the beta is 0.84 and standard deviation is 0.48.a.Which stock is riskier?Stock A is riskier, though stock B has greater total risk.b.If the risk-free rate is 4% and the market risk premium is 8%, what is theexpected return for a portfolio that is composed of 60% A and 40% B?R p = .6(.132) + .4 (.1072) = .12208c.If the correlation between the returns of A and B is 0.50, what is the standarddeviation for the portfolio that includes 60% A and 40% B?σp2 = (.6)2(.28)2 + (.4)2(.48)2+ 2*.5(.6)(.4)(.28)(.48) = 9.7%, σp = 31.2%1. Differentiate the following terms/concepts:a. Lottery and insuranceA lottery is a prospect with a low probability of a high payoff. Many people buy lottery tickets, even with negative expected values. These same people buy insurance to protect themselves from risk. Normally, insurance is a hedge against a low-probability large loss. These choices are inconsistent with traditional expected utility framework but can be explained by prospect theory.b. Segregation and integrationIntegration occurs when positions are lumped together, while segregation occurs when situations are viewed one at a time.c. Risk aversion and loss aversionA person who is risk averse prefers the expected value of a prospect to the prospect itself, whereas for a person who is loss averse, losses loom larger than gains.d. Weighting function and event probabilityEvent probability is simply the subjective view on how likely an event is. The weighting function is associated with the probability of an outcome, but is not strictly the same as the probability as in expected utility theory.2. According to prospect theory, which is preferred?a. Prospect A or B?Decision (i). Choose between: A(0.80, $50, $0)and B(0.40, $100, $0)Prospect A is preferred due to risk aversion for gains. While both have the same expected changein wealth, A has less risk.b. Prospect C or D?Decision (ii). Choose between: C(0.00002, $500,000, $0) and D(0.00001, $1,000,000, $0) Prospect D, with more risk, is preferred due to the risk seeking that occurs when there are very low probabilities of positive payoffs.c. Are these choices consistent with expected utility theory? Why or why not? Violation of EU theory because preferences are inconsistent. The same sort of Allais paradox proof from chapter 1 can be used. It is also necessary to make the assumption of preference homogeneity, which means that if D is preferred to C, it will also be true that D* is preferred to C* where these are:C*:(0.00002, $50, $0) and D*: (0.00001, $100, $0)3. Consider a person with the following value function under prospect theoryv(w) = w.5 when w > 0= -2(-w) .5 when w < 0a. Is this individual loss-averse? Explain.This person is loss averse. Losses are felt twice as much as gains of equal magnitude.b. Assume that this individual weights values by probabilities, instead of using a prospect theory weighting function. Which of the following prospects would be preferred?P1(.8, 1000, -800) P2(.7, 1200, -600) P3(.5, 2000, -1000)We calculate the value of each prospect:V(P1) = .8(31.62)+.2(-2)(28.27)= 13.982V(P2) = .7(34.64)+.3(-2)(24.49)= 9.55V(P3) = .5(44.72)+.5(-2)(31.62)= 9.265Therefore prospect P1 is preferred.4. Now consider a person with the following value function under prospect theory:v(z) = z.8when z ≥ 0= -3(-z).8when z < 0This individual has the following weighting function:where we set =.65.a. Which of the following prospects would he choose?PA(.001, -5000) PB(-5)Compare the value of each prospect:V(PA) = .983(0) + (-3)(910.28)(.011) = -30.15 (note use of weights)V(PB) = 3 * 1 * -3.62 = -10.87Therefore you would prefer B.b. Repeat the calculation but using probabilities instead of weights. Whatdoes this illustrate?V(PA) = .999 * 0 + 3 * .001 * -910.28 = -2.73 (note use of probability)V(PB) = 3 * 1 * -3.62 = -10.87Therefore you would prefer A. The reason for the switch is that risk seeking is maintained in the domain of losses (implying rejection of losses) if probabilities are used instead of weights.5. Why might some prefer a prix fixe (fixed price) dinner costing about the same as an a la carte one (where you pay individually for each item)? (Assume the food is identical.) Payment decoupling is encouraged with prix fixe. You only face the loss of money once rather thanmultiple times (occurring if you have to face the cost of each item individually using an à la carte scheme).1. Differentiate the following terms/concepts:a.Primacy and recency effectsA primacy effect is the tendency to rely on information that comes first when making an assessment, whereas a recency effect is the tendency to rely on the most recent information when making an assessment.b.Salience and availabilityThe salience of an event refers to how much it stands out relative to other events, whereas the availability refers to how easily the event is recalled from memory.c.Fast-and-frugal heuristics and bias-generating heuristicsFast and frugal heuristics require a minimum of time, knowledge and computation in order to make choices. Often they lead to very good choices. Sometimes however heuristics go astray and generate behavioral bias.d.Autonomic and cognitive heuristicsAutonomic heuristics are reflexive, autonomic, non-cognitive, and require low effort levels. Cognitive heuristics require more deliberation. Autonomic heuristics are appropriate when a very quick decisionmust be made or when the stakes are low, whereas cognitive heuristics are appropriate when the stakes are higher.2. Which description of Mary has higher probability?a. Mary loves to play tennis.b. Mary loves to play tennis and, during the summer, averages at least a game aweek.Explain your answer. Define the conjunction fallacy. How does it apply here?Assume for the purpose of illustration that the probability that someone loves to play tennis is .2; the probability that someone plays tennis once or more a week during the summer is .1; and the probability of one or the other of these things is .22.Pr(loves tennis) = .2Pr(loves tennis AND averages 1+)= Pr(loves tennis) + Pr(averages 1+) - Pr(loves tennis OR averages 1+)= .2 + .1 - .22 = .08The second probability has to be less because it has one more requirement (not only do you have to love tennis but you also have to play regularly, but some tennis lovers might just be too busy to do this). When people commit the conjunction fallacy (the belief that the joint probability is more likely than one of its components), they will think the second (joint) event is more likely because it sounds logical that someone who loves tennis will also play regularly.3. Rex is a smart fellow. He gets an A in a course 80% of the time. Still he likes his leisure, only studying for the final exam in half of the courses he takes. Nevertheless when he does study, he is almost sure (95% likely) to get an A. Assuming he got an A, how likely is it he studied? If someone estimates the above to be 75%, what error are they committing? Explain.P(studied|A) = P(A|studied) * [P(studied)/P(A)]= .95 * (.5 / .8) = .59375The “sample” is that he got an A. Without knowing this you would have said the probability that he studied was .5. You rightfully shifted the probability upwards based on the sample, but you moved it too much. You should have stayed closer to the base rate, so you have committed base weight underweighting.Another example of this is, when watching sports and noticing that someone is playing better than they normally do, believing that they have permanently improved.4. Why are two people who witnessed the same event last month likely to describe itdifferently today?Memory is very imprecise. The common view that past experiences have somehow been written to the brain’s hard-drive and are then retrieved, even if at considerable effort, is not the way our brain works. In fact, memory is reconstructive. Therefore people in remembering some event will reconstruct it in different ways.5. How do gambling fallacy and clustering illusion relate to representativeness?Provide examples from sports. In what way are they different?Representativeness exists when one thinks that A should look like B. A can be the sample and B the distribution, or vice-versa. A belief in a hot hand is thinking the conditional distribution should look like the sample. But sometimes it seems that people think the reverse, namely that the sample, however small, should look like the distribution, in the sense that essential features should be shared.A hot hand often comes into play in sports when people don’t know for certain the skill level of an athlete, and the extent to which it may change. Gambler’s fallacy is likely to exis t when the underlying distribution (e.g., cards or dice) is well-known.1.Differentiate the following terms/concepts:a.Miscalibration and excessive optimismA person who suffers from miscalibration overestimates the precision of his knowledge, whereas one who suffers from excessive optimism thinks good things (e.g., succeeding in a business venture) are more likely to happen than objectively should be thought.b.Better-than-average effect and illusion of controlThe better-than-average effect refers to the tendency for a person to rate himself as above average. If you are subject to illusion of control, this indicates a tendency to think that you have more control over events than can objectively be true.c.Self-attribution bias and confirmation biasSelf-attribution bias is the tendency to attribute successes to one’s own abilities, while blaming failures on circumstances beyond one’s control. C onfirmation bias is the tendency to search out evidence consistent with prior beliefs and ignore conflicting data.d.Pros and cons of overconfidenceResearch shows that predictions about the future tend to be more optimistic when the event forecasted is in the more distant future or when a person has committed to a course of action. When these conditions are met, excessive optimism may be useful in enhancing performance. Otherwise, it can lead to biased decision-making.2.Is miscalibration greater for easy questions or hard questions? Is it greater whenwe look at 50% confidence ranges or 98% confidence ranges?Miscalibration tends to be greater for hard questions. Sometimes one can even be underconfident in the case of easy questions. This is called the hard-easy effect. Also, miscalibration tends to be greater in the tails (98% ranges vs. 50% ranges).3.Provide an example where someone can be both excessively optimistic andmiscalibrated at the same time.Many examples could be provided. To repeat the one from the chapter, let’s suppose you are about to bowl with your friends. In standard 10-pin bowling, 300 is the maximum score, and 200 an excellent one. You are feeling buoyant today and boldly predict 225 as your score, with a 90% confidence range of between 200 and 250. Over the year you have averaged 175, with 90% of your results falling within 50 points of this magnitude (i.e., between 125 and 225). On the basis of your season record,you are excessively optimistic (by 50 points). Moreover, you are miscalibrated, with your confidence interval being only 50% as wide as it should be.4.Overconfidence does not quickly dissipate via learning because of the existence ofcontributing biases. Explain.Self-attribution bias, the tendency for people to attribute successes or good outcomes to their own abilities, while blaming failures on circumstances beyond their control, can lead to an increase inoverconfidence. Suppose an overconfident individual observes personal performance outcomes thatare logically a combination of external and internal (to the individual) forces. If things go well, the thinking will be that this is because of great ability, skill or knowledge (much more so than anobjective consideration of circumstances would warrant), and the result will be an increase in overconfidence. On the other hand, adverse events, being only moderately ascribed to personal forces, will not lead to symmetric (but of opposite sign) revisions in overconfidence. As it were, people “learn” to be overconfident. Another contributing bias is hindsight bias, which pushes peop le intothinking that “they knew it all along.” Going hand in hand with hindsight bias is confirmation bias, the tendency to search out evidence consistent with one’s prior beliefs and to ignore conflicting data.5.In 2007 the New England Patriots (an American football team) had a banner yearwinning all 16 regular season games. In these 16 games their points were: 38, 38,38, 34, 34, 48, 49, 52, 24, 56, 31, 27, 34, 20, 28, and 38. Despite this obvious success,their fans were still a bit overconfident going into the playoffs. The consensusamong fans was that they would average 50 points per game in the playoffs. Plustheir fans were 95% sure that they would be within five points of this number (45to 55). Illustrate the dimensions of their overconfidence. (For the purpose of thisquestion, assume the Patriots participated in four playoff games.)As in question 3, both miscalibration and excessive optimism are present. To illustrate, the Patriots scored on average 36.81 points. It is believed that they will score 50 points in the playoffs. This seems to be a case of excessive optimism. (Also it is likely that their opponents will be better in the playoffs.) As for miscalibration, the standard deviation of points scored during the season is easily calculated to be 10.19. The standard deviation of the mean based on four observations is 10.19 / 2 = 5.09. A 95% confidence interval should be about four standard deviations in width, or in this case over 20 points. This is twice as wide as the actual standard deviation of the fans of the Patriots.1. Differentiate the following terms/concepts/individuals:a.IQ and EQThe intelligence quotient (IQ) measures a person’s intelligence, whereas the emotional quot ient (EQ) measures a person’s ability to identify and manage emotional responses.b.Mood and emotionA mood is a general feeling that does not focus on anything in particular, whereas an emotion is a mental and physiological state defined by observable features.c.Human brain and the brain of other animalsThe cerebrum is what distinguishes the human brain from those of other vertebrate animals. The cerebrum gives humans the ability to plan which is a big advantage over other animals.d.Phineas Gage and ElliotPhineas and Elliot lived in very different times, but both experienced brain damage that had a significant impact on their behavior. Based on case studies of patients like Phineas and Elliot, Damasio and other scientists conclude that emotion has an important influence on reasoning.2. You are considering managing your own money rather than trusting in an investment advisor. Some argue that emotional intelligence may be just as important as investment knowledge. Do you agree? Discuss.Answers can var y for this question depending on the student’s evaluation of their own investment expertise. Students should recognize that IQ and EQ are both important for success.3. Imagine you just won a lottery with a $10 million prize. What primary emotions might you feel? (Note that the seven primary emotions generally include anger, contempt, disgust, fear, happiness, sadness, and surprise.) Describe their features, including the six used to define an emotion. Be sure to include observables.According to Elster, J. (1998), the seven primary emotions include anger, contempt, disgust, fear, happiness, sadness, and surprise. Again students’ answers may vary but they probably will identify happiness and, perhaps, surprise. They should then describe the observable features of the emotion they identify including cognitive antecedents, intentional objects, physiological arousal, physiological expressions, valence, and action tendencies.4. Your colleague argues that emotion and reasoning are completely separate influences on decision-making. Do you agree? Discuss.As the chapter discusses, emotion and reasoning are not separate influences on the choices we make. Today psychologists recognize that emotions include cognitive, physiological, and overt behaviorale lements. A person’s reasoning is the result of a complex interaction of the mind and body, and an understanding of the process must include all aspects of the person.5. Put yourself in the place of an equity mutual fund manager. Think of all the stocks you might select for inclusion in the portfolio. How would emotions enhance your decision-making process?Emotions help the decision-maker sift through that mountain of available information and make a decision when one needs to be made.1. Differentiate the following terms/concepts:a.Good company and good stockA good company has positive attributes such as a strong management team. A good stock is one you expect to outperform in the future. If markets are efficient there are no good or bad stocks.b.Momentum-chaser and contrarianA momentum-chaser buys stocks that have performed well in the past. A contrarian buys stocks that have not performed well in the past.c.International diversification and domestic diversificationPortfolio theory teaches us that diversification pays off. If we stick with domestic securities, this is domestic diversification. If, as we should, we move to foreign securities as well, this is internationaldiversification.d.Anchoring and herdingAnchoring means sticking with maintained or prior views. Herding is going with the crowd. One could imagine a group of anchored analysts. In response to some new information several changetheir views. Others may herd (i.e., follow these analysts) even without studying the new information.2. In a regression of perceived long-term investment value (LTIV) on size (S), bookto market (B/M), and management quality (MQ), the following coefficients (all significant) were estimated:LTIV = -.86 + 0.15log(S) + -.11log(B/M) +.85MQDiscuss what can be learned from this regression (which appears in Shefrin, H., and M. Statman, 1995, "Making sense of beta, size, and book-to-market," Journal of Portfolio Management 21 (no. 2), 26-34).In this regression, value as a long-term investment is regressed on size, book-to-market, andmanagement quality. Management quality strongly impacts perceived investment value. This does not make sense because all positive attributes should already be embedded in stock price. Additionally,size and book-to-market, even after accounting for their impact on management quality, independently influence investment value. Big firms are viewed as good investments, and growthcompanies are viewed as good investments. In other words, big high-growth firms are viewed as representative of good investments. Interestingly, the empirical evidence points in the exact opposite direction. It is small-cap value firms that have historically outperformed. Indeed, the tendency for individuals to use representativeness in this context may have contributed to the small-firm and valueanomalies.3. Home bias has a potential information-based explanation. Discuss.One reason why investors may favor local markets – where local is interpreted as either domestic or close-to-home but within the same country – is because they may possess, or may feel that they possess, informational advantages. Gains from being geographically close to a company may appear in improved monitoring capability and access to private information. One paper established that mutual fund managers, consistent with familiarity bias, tend to favor local investments, that is, they tend to buy firms headquartered within a 100-mile (or 161-kilometer) radius of their head office. Specifically, they conclude that the average manager invests in companies that are located within 160-84 kilometers, or 9-11%, closer to her than the average firm she could have held.Research has shown a payoff to local investing. Fund managers on average earn 2.67% per year more on local investments, while local stocks avoided by managers underperform by 3% per year. Moreover, they find that those better able to select local stocks tend to concentrate their holdings more locally. There is even evidence that retail investors are able to benefit from local investing. Based on a dataset of retail investors, local investments outperform remote investments by 3.2% per year.4. In Canada there are two official languages, French and English. Some Canadiancorporations are headquartered in Quebec where French is the official language.Most however are headquartered outside Quebec where English is dominant.Would you expect Quebecers to invest more in Quebec companies, and non-Quebecers to invest more in companies based outside Quebec? Also, do you think。