EPTI walked into the very first class for this course this semester. The prof sees me walk in, and before I get to any seat, and shouts at me to hold on. He points at the example question on the screen and asks me to solve it before I can sit down.
I can't remember the exact question, but it is involving the buying and selling of bonds, and optimizing the investment to gain the largest monetary return above the MARR.
So, first thing I do is setup the equations properly (making them if needed). The price of the bond vs the interest rate of them can be simplified into a single equation, for instance.
I then take the gradient of the two equations that I cannot further simplify. I find where these are equal to zero, which are the optimized positions (having already clarified that I was excluding any interest rate equal to 0 or below, since the interest rate and price of the bond are in an inverse relationship, among other things). All this time, the prof is just letting me do my thing.
I find two local maximums/minimums/saddle points/inflection points/whatever else they can be, and I also find that as any of the variables approach infinity, or zero, the return on the investment approaches zero. So, I then check the derivative of the gradients to figure out what they are. Both end up being local maximums, so, as such, I plug both answers into the equation for the profit, and find that both are very close values, but one is larger. The question is dealing with hundreds of millions of dollars btw. The difference between these two answers is less than 60 dollars. One of the interest rates I found was around 4.5%, the other was around 5.5%, and the Par for the bond was 5%.
Anyways, when I give him my answer, he goes onto the next slide. The answer that he found was through a very simple formula, after making a certain assumption based on the situation at hand. He looked at me and said "you clearly didn't do the reading I assigned through the email", or something of the sort. The answer he got was the 4.5% answer. It earned a bit of laughter from the rest of the class.
I look around, and I don't see anyone I recognize from any of my other classes. Something is starting to feel wrong about this.....
I then looked at the answers I had, and saw that the one for 5.5% that I had was actually the higher value, not the lower. I ask him to check the answer using the numbers I found. He also got a higher value than using his equations to find the numbers for it.
At this point, he's actually looking a little shocked. I then ask him what class this actually is.
"ADM 4 _ _ _" A fourth year financial management class.
I tell him "Oops, I'm in the wrong class. I'm a second year engineering student".....
He laughs at this, and tells me that if I gave that answer on a test, he'd give me more than 100% on that answer. He then goes to pour over why his method gave him a different answer, even though they were stupidly close, and little point in actually figuring out why they were different.....
I leave, and step into the classroom I'm supposed to be in (right next door). I've missed nearly 30 minutes of that class.....
Why the fuck did I go into engineering? I'm failing, or coming close to it in my classes, and that looked like a fucking breeze.....
Oh, wait, I remember. I'm in it for this:
![[image loading]](http://en.wikivisual.com/images/7/73/DSC03798_Cropped.jpg)
That's right bitches! One ring to rule them all, and in the darkness bind them!
+ Show Spoiler +
On January 13 2010 09:32 lMPERVlOUS wrote:
Actually, I'm not that brilliant in math..... It just happened that I understand optimization techniques really well. I still failed Cal III after all..... And, having thought of it, I think I figured out how I made a mistake.....
I assumed that the years were a continuous variable (even though they weren't)..... I should have assumed it was a step function, which would have made the question unsolvable (at least, I don't have a clue how to solve that)..... If the prof's formulas were to take that into account (not that I see how that would be accomplished, but I dunno), his answer may have been higher than mine would have been.....
Fuck.....
EDIT - Actually, now I'm not sure how I got the same answer as the prof? Maybe I was close enough to an integer?
Actually, I'm not that brilliant in math..... It just happened that I understand optimization techniques really well. I still failed Cal III after all..... And, having thought of it, I think I figured out how I made a mistake.....
I assumed that the years were a continuous variable (even though they weren't)..... I should have assumed it was a step function, which would have made the question unsolvable (at least, I don't have a clue how to solve that)..... If the prof's formulas were to take that into account (not that I see how that would be accomplished, but I dunno), his answer may have been higher than mine would have been.....
Fuck.....
EDIT - Actually, now I'm not sure how I got the same answer as the prof? Maybe I was close enough to an integer?
![[image loading]](http://www.joshiadejonge.com/guitar021.png)
if you understand basic calculus.
