This paper is an updated version of a previous working paper, Capital Budgeting in the Presence of Managerial Overconfidence and Optimism, by the same authors. Financial support by the Rodney L. white Center for Financial Research is gratefully acknowledged. The authors would like to thank Andrew Abel, Jonathan Berk, Domenico Cuoco, David Denis, Janice Eberly, Robert Goldstein, Peter Swan, and seminar

Elasticity . . . … is a measure of how much buyers and sellers respond to changes in market conditions … allows us to analyze supply and demand with greater precision

Do the equilibrium price and quantity maximize the total welfare of buyers and sellers? Market equilibrium reflects the way markets allocate scarce resources. Whether the market allocation is desirable is determined by welfare economics

Integral Equation Methods Reminder about galerkin and Collocation Example of convergence issues in 1D First and second kind integral equations Develop some intuition about the difficulties Convergence for second kind equations Consistency and stability issues

Integral Equation Methods Reminder about Galerkin and collocation Example of convergence issues in 1D First and second kind integral equations Develop some intuition about the difficulties Convergence for second kind equations Consistency and stability issues Nystrom Method

Outline Laplace Problems Exterior Radiation Condition Green's function Ansatz or Indirect Approach Single and Double Layer Potentials First and Second Kind Equations Greens Theorem Approach First and Second Kind Equations

1 Outline for this Module Slide 1 Overview of Integral Equation Methods Important for many exterior problems (Fluids, Electromagnetics, Acoustics) Quadrature and Cubature for computing integrals One and Two dimensional basics Dealing with Singularities 1st and 2nd Kind Integral Equations

Laplace Problems Exterior Radiation Condition Green’s function Ansatz or Indirect Approach Single and Double Layer Potentials First and Second Kind Equations Greens Theorem Approach First and Second Kind Equations

Directions: In this section you will hear ten short conversations At the end of each conversation, a question will be asked about what was said. Both the conversation and the question will be spoken only once. After each question there will be a pause. During the pause, you must read the four choices marked A), B), C)and D), and decide which is the best answer. Then mark the corresponding letter on the answer sheet with a single line through

Part I Listening Comprehension (20 minutes) Directions: In this section, you will hear ten short conversations. At the end of each conversation, a question will be asked about what was said. Both the conversation and the question will be spoken only once. After each question there will be a pause. During the pause, you must read the four choices marked A),),) and D),and decide which is the best answer. Then mark the corresponding letter on the Answer Sheet with a single line through the center