Microsoft Office Tutorials and References
In Depth Information
Key Terms
Data rich
Data poor
Physical Model
Analog Model
Symbolic Model
Risk Proﬁles
Deterministic
Probabilistic
PMT() Function
Model or Problem Deﬁnition Phase
Process Flow Map
Complexity
Pre-Modeling or Design Phase
Modeling Phase
Analysis Phase
Final Acceptance Phase
Inﬂuence Diagram (IFD)
Positive Inﬂuence
Negative Inﬂuence
Mutually Exclusive
Collectively Exhaustive
Decision Trees
Expected Value
Sensitivity Analysis
Scroll Bars
Spinners
Combo Boxes
Option Buttons
Data Table
Macro
VBA
Group Box
Problems and Exercises
1. Data rich data is expensive to collect—T or F?
2. What type of model is a site map that is associated with a website?
3. The x-axis of a risk proﬁle is associated with potential outcomes—T of F?
4. Deterministic is to probabilistic as point estimate is to range—T or F?
5. What is a single annual payment for the PMT() function for the following data:
6.75% annual interest rate; 360 months term; and \$100,000 principal?
6. Draw a Process Flow Map of your preparation to leave your house, dormi-
tory, or apartment in the morning. Use a rectangle to represent process steps
like, brush teeth , and diamonds to represent decisions, like wear warm weather
clothes (?).
7. Create a diagram of a complex decision or process of your choice by using the
structure of an inﬂuence diagram.
8. An investor has 3 product choices in a year long investment with forecasted
outcomes—bank deposit (2.1% guaranteed); a bond mutual fund (0.35 prob-
ability of a 4.5% return; 0.65 probability of 7%), and a growth mutual fund
(0.25 probability of –3.5% return, 50% probability of 4.5%, and remaining
probability of 10.0%).
a. Draw the decision tree and calculate the expected value of the three invest-
ment choices. You decide that the maximum expected value is how you will
choose an investment. What is your investment choice?
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