7.1. Suppose that you have a stopping time 7 in the 4-period binomial model such that thefollowing is true about T:|r(HHTT)-T(HHTT) = 0; 7(TTHH)=2; T(HTHT)=2%3DFor cach other state, give all of the possible values that 7 could have. You do not need tolist cach state indivudually; for example it is possible to describe what happens in all statesof the form (H, H, w3,wA) in one go.

Given a 4-period binomial model such that the following is: τ(HHTT)=∞τ(TTHH)=2τ(HTHT)=2 1- period…

Answered: 7.1. Suppose that you have a stopping…

Algebra & Trigonometry with Analytic Geometry

13th Edition

ISBN:9781133382119

Author:Swokowski

Publisher:Swokowski

Chapter5: Inverse, Exponential, And Logarithmic Functions

Section: Chapter Questions

Problem 9T

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Assume that the entire sample has 8 positive observations and 4 negatives observations. Variable X1: at the left branch has 9 positive observations and 3 negatives observations;at the right branch has 8 positive observations and 8 negative observations. What is the information gain or reduction in uncertainty of X1 using the Gini index? (round to two decimal spaces)
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