9. An elementary single period market model contains a risk-free asset with interest rate r = 5% and a risky asset S which has price 30 at time t = 0 and will have either price 10 or 60 at time t = 1. Find a replicating strategy for a contingent claim with payoff h(S₁) = max(20 - S₁, 0) + max(S₁ — 50, 0). Total [8 Marks]
Q: Can you evalutate the following summation:∑_{y=1}^{x} 2 / ((x + y - 1)(x + y + 1))
A:
Q: No chatgpt pls will upvote Already got wrong chatgpt answer Plz
A: The question asks to graph the curve r(t)=⟨2cos(πt),t,3sin(πt)⟩ in {R}^3, labeling the coordinates…
Q: 3. A spreadsheet consists of cells indexed by a row and a column. Each cell contains either a value…
A: (a) Modeling the Spreadsheet as a GraphA spreadsheet can be represented as a directed graph…
Q: I am confused regarding this question. This is for the math course differential equations.
A: Given that 15 grams of C is formed in 10 minutes, we can calculate the rate of reaction as…
Q: 1.6. By manipulating Taylor series, determine the constant C for an error expansion of (1.3) of the…
A: Let's go through the mathematical derivation of CCC step by step using Taylor series expansion.…
Q: 6) Consider the initial value problem y + cos πι + e²бty = 0, y(-1) = 0, y' (-1) = 0 Which of these…
A: First, we simplify the given equation. The term cos(π) is a constant and equals -1. So, the equation…
Q: Calculate a = x+y, b = z + 1, then keep numbers a and b. Questions marked with *** are to be graded.…
A:
Q: Please help.
A: Question 13: In which quadrant is the following true?tanθ<0 and cosθ<0Solution:tanθ<0:…
Q: Consider the following statement: For all integers a and b, if a 0 (mod 6) and b #0 (mod 6), then ab…
A: Step 1: Step 2: Step 3: Step 4:
Q: ) The set {1,2,..., 22} is to be split into two disjoint non-empty sets S and T in such a way that:…
A: Step 1: Step 2: Step 3: Step 4:
Q: 5 сл Use vectors to prove the following theorems from geometry: (a) The diagonals of a parallelogram…
A: Step 1:
Q: not use ai please
A: Step 1: Step 2: Step 3: Step 4:
Q: use Euler’s method to find approximate values of the solution of the given initial value problem at…
A: Euler's method uses the iterative formula:yn+1=yn+hf(tn,yn)where f(t,y)=5−3yWe will implement…
Q: PLEASE ALL PARTS!!!
A:
Q: Solve the following systems using Gauss Seidal and Jacobi iteration methods for n=8 and initial…
A: Step 1: Given SystemWe have the system of…
Q: 4. Prove: If x {0, 1} then x² - -x=0. 5. 6. Prove by contrapositive: Suppose x is a real number. If…
A:
Q: No chatgpt pls will upvote
A: Step 1: Step 2: Step 3:
Q: Please ensure that all parts of the question are answered thoroughly and clearly. Include a diagram…
A:
Q: 3) Recall that the power set of a set A is the set of all subsets of A: PA = {S: SC A}. Prove the…
A: We will prove it in two parts if A⊆B, then PA⊆PB and if PA⊆PB, then A⊆B.
Q: Pls help asap
A: Problem 3:Step 1: Identify the Greatest Common Factor (GCF)The GCF of the coefficients (-4, 2, 72)…
Q: Lemma:- Let x = AX, Y° = By where A = B= 0 Bo then the linear system X = AX Y = BY are Linearly…
A:
Q: Lacy is a single taxpayer. In 2024, her taxable income is $56,000. What is her tax liability in each…
A: To determine Lacy's tax liability for 2024, we use the IRS tax brackets for single filers: 2024…
Q: Please help.
A: Let's give it a try. To provide precise answer, I believe further reference is necessary, but I will…
Q: Assignment Brief: 1. Use the trapezium rule with five ordinates (four strips) to find an…
A: To approximate the integralI=∫13x3+31dxusing the trapezium rule with five ordinates (four strips),…
Q: Given f(x) = 6x - 7, determine f-1(10) Please explain step by step how to answer this question in…
A: We find f-1(10) as follows: 1. Start with the function: f(x)=6x−7 2. Replace f(x) with y: y=6x−7…
Q: An eccentric, compressive 270-lb force P is applied to the end of a cantilever beam. Replace P with…
A: Step 1:
Q: No chatgpt pls will upvote
A: Step 1: Step 2:
Q: f(x) = x + 1; x(x) = x − 2. Solve the equation for x : |f(x)+4(x)| = |f(x)|+|4(x)|. 00
A: GIVEN STEP 1 STEP 2 Case 1 : Case 2 : Case 3 : Case 4 :
Q: Please help.
A:
Q: what is 4m-1? m=3
A: In this problem, we are given the equation 4m-1 and the value of m is given as 3.
Q: Not use ai please
A: The predicate P(x,y) is defined as x = 2y + 1, where x and y are integers (elements of ℤ). (a) ∃x ∈…
Q: Q4: State the Fundamental Theorem of Independent of Path and Morera's Theorem. Why can't apply these…
A: 1. Fundamental Theorem of Independence of Path:This theorem states that if a complex function f(z)…
Q: Firm Alpha operates in a perfectly competitive market in a constant-cost industry and is earning…
A: a. The firm can maximize its profits if it produces at the point where marginal cost (MC) equals…
Q: Please help with as much detail as possible. Thanks for k(x)=4/5 x - 6, determine k -1(8)
A: Given function, k(x)=54x−6 Find the inverse function, Replace x with k-1(x) and k(x) with x,…
Q: 4.5 Use zero- through third-order Taylor series expansions to predict f(2.5) for f(x) = 25x³- 6x²+7x…
A: Step 1: Write the Taylor series formula The Taylor series expansion of a function f(x) about a…
Q: Q4 4 Points 3 Let A = 5 -1 Let S : R³ → R² be the linear transformation whose standard matrix is A.…
A: I hope this helps.Thankyou Please do rate
Q: 4 The plane 2x + 3y+ 6z = 6 intersects the coordinate axes at P, Q, and R, forming a triangle. Draw…
A: The points P, Q, and R are the points where the plane intersects the x, y, and z axes respectively.…
Q: Q6*) Describe the plane paths of light in the two-dimensional media in which the light velocities…
A: May this answer helpful to you.
Q: Q7. Using the numeral symbols given in Question 4, calculate the following addition and subtraction.…
A:
Q: Find xyz cordinates of center of gravity given z = 3.47 in
A:
Q: No chatgpt pls will upvote
A:
Q: Please ensure that all parts of the question are answered thoroughly and clearly. Include a diagram…
A: Detailed explanation:
Q: 2. Disprove the following by finding counterexamples: 3. (a) For all sets A and B, AU (BNA) = B. (b)…
A: Note : U is the universal set.
Q: djdjjdjdk4jr i need help on part C,
A:
Q: LESSON 19 SESSION 3 3 Angel jumps rope. He does 38, 50, 22, and 29 jumps. How many jumps does Angel…
A: If you have any questions let me know in the comment box immediately thankyou.
Q: Use Variation of Parameters to solve
A:
Q: 18.9. Let denote the boundary of the rectangle whose vertices are -2-2i, 2-21,2+i and -2+i in the…
A: Here's detailed explanation:part (a): 1. The Problem:We are asked to evaluate the contour…
Q: Given r = e−p2−q2, p = es, q = e−s, find dr/ds
A: Step 1:Step 2: Step 3: if you have any related queries, feel free to ask !!! (Please provide proper…
Q: Q9. Complete the multiplication table below, then use it to perform divisions given below. Show your…
A: Completing the Multiplication Table (Base 5)Since this table follows base 5 multiplication, let's…
Q: Please help with as much detail as possible. Thanks
A:
![9. An elementary single period market model contains a risk-free asset with interest rate
r = 5% and a risky asset S which has price 30 at time t = 0 and will have either price
10 or 60 at time t = 1. Find a replicating strategy for a contingent claim with payoff
h(S₁) = max(20 - S₁, 0) + max(S₁ — 50, 0).
Total [8 Marks]](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F7560de44-7bbe-4fed-b63a-532eb75ed369%2F56e574aa-2cc7-40b4-93c8-eddd394bfc6c%2Fn3wtpce_processed.png&w=3840&q=75)
Step by step
Solved in 2 steps with 4 images
- A standard "money demand" function used by macroeconomists has the form In(m) = Bo + B, In(GDP) + B2R, Where m is the quantity of (real) money, GDP is the value of (real) gross domestic product, and R is the value of the nominal interest rate measured in percent per year. Supposed that B, = 2.15 and B, = -0.06. %3D What is the expected change in m if GDP increases by 3%? The value of m is expected to V by approximately%. (Round your response to the nearest integer) What is the expected change in m if the interest rate increases from 1% to 9%? The value of m is expected to ▼ by approximately %. (Round your response to the nearest integer)A loan is made at time 0 at simple interest at a rate of 5%. (b) What is the effective interest rate for the interval [4,6]?4. For a fully discrete whole life insurance of 10,000 on (45): (i) Båth net and gross premiums are reduced by half starting with the 21st premium. (ii) Expenses are 50% of premium in the first year, 10% of premium in renewal years. (iii) A45 = 0.15, A95 = 0.24, A75 = 0.40 %3D (iv) d = 0.04 (v) 20P45 = 0.90 (vi) 30P45 = 0.75 %3D Calculate the expense reserve at time 30.
- The real risk-free rate (r*) is 2.8% and is expected to remain constant. Inflation is expected to be 7% per year for each of the next four years and 6% thereafter. The maturity risk premium (MRP) is determined from the formula: 0.1(t-1) %, where t is the security's maturity. The liquidity premium (LP) on all Rinsemator Group's bonds is 1.05%. The following table shows the current relationship between bond ratings and default risk premiums (DRP): Rating U.S. Treasury AAA AA A BBB O 10.77% 11.82% Rinsemator Group issues 7-year, AA-rated bonds. What is the yield on one of these bonds? Disregard cross-product terms; that is, if averaging is required, use the arithmetic average. O 5.25% Default Risk Premium O 11.22% 0.60% 0.80% 1.05% 1.45% Based on your understanding of the determinants of interest rates, if everything else remains the same, which of the following will be true? A BBB-rated bond has a lower default risk premium as compared to an AAA-rated bond. O The yield on an AAA-rated…Assume (FT2 = FT1 (1 + TIT2) + T1CT2 is the equilibrium situation. Also assume that T2- T1 is one year, that T1CT2 = $1 and that TirT2 = 10%. %3D Assume the initial prices are FOT1 = 100 & FOT2 = 133. A trader goes long the FT1 contract and short the FT2 contract believing these are not equilibrium prices and that he will profit when they adjust to equilibrium. Say the next day, t+ 1, the t+1FT1 price moves to 115 and t+1FT2 adjusts to an equilibrium price. If the trader round trips his positions on day t+1, what is his profit or loss on the FT2 position? profit of 11 loss of 11 cannot be determined from the information given profit of 5.5A standard "money demand" function used by macroeconomists has the form In(m) = fo + B,In(GDP) + 62R, Where m is the quantity of (real) money, GDP is the value of (real) gross domestic product, and R is the value of the nominal interest rate measured in percent per year. Supposed that B, = 2.28 and B2 = - 0.09. What is the expected change in m if GDP increases by 1%? The value of m is expected to increase by approximately 2 %. (Round your response to the nearest integer) What is the expected change in m if the interest rate increases from 1% to 6%? The value of m is expected to decrease by approximately 45 %. (Round your response to the nearest integer)
- Suppose you have inherited K100,000 from your father-in-law that can be invested in a combination of only two stock portfolios, with the maximum investment allowed in either portfolio set at K75,000 . The first portfolio has an average rate of return of 10%, whereas the second has 20%. In terms of risk factors associated with these portfolios, the first has a risk rating of 4 (on a scale 0 to 10), and the second has 9. Since you wish to maximize your return, you will not accept an average rate of return below 12% or risk factor above 6. Formulate the linear programming model for the problem. How much should you invest in each portfolio? Solve the problem by simplex method.2. An insurance company uses the model above to calculate premiums for a special T-year term life insurance policy. The basic sum insured is $100,000, but the death benefit is $150,000 if death occurs as a result of an accident. The death benefit is payable immediately on death. Premi- ums are payable continuously throughout the term. The effective rate of interest is 3% per year and there are no expenses. The policy is issued to a life aged 35. 毎回 (ii) (iii) calculate the annual premium for this policy calculate the policy value at time 1, 2, 1-2, 1-1 and t in state Q comment on the results in (ii)is 200,000, what is the expected population after 5 years? tion of a certain city in the southwest will increase by 8% during each of the next 5 years. If the current population POPULATION GROWTH It has been projected that the popula- during each of the next 5 years. If the current population is 200,000, what is the expected population after 5
- 77. During a period of decline in stock market prices a stock sold at Rs. 50 per share on one day Rs. 40 on the next day and Rs. 25 on the third. (1) If an investor bought 100, 120 and 180 shares on the respective three days, find the average price paid per share. (ti) If the investor bought Rs. 1000 worth of shares on each of the three days, find the average price paid per share. IB.A. (H) Econ. Delhi Univ.. 2007: B.Com...Suppose the Marginal product of labor in the economy is given by MPN= .002(16,000-N), while the supply of labor is N=1000 + 1000w. Find the market clearing real wage rate and level of employment. What happens to the wage rate and employment if wealth rises, reducing the supply of labor to N= 500 + 1000w? As in (a), what is the unemployment rate if real wage is 1 more than the equilibrium wage? (hint: solve the real wage and then add it by 1, then find the difference of quantity of labor supplied and demanded).Please answer no. 4 only