Consider the following discrete time one-period market model. The interest rate is zero. The stock price is given by So = 10 and S1is a random variable taking two possible values S, = 8 and S = 12.Consider a call option expires at time T = 1 with strike price K = 9. If you are replicating one unit of this option with a replicatingportfolio, how many units of the stock should you hold?Select one:O a.-1/3O b. -1/4O c. 1/4O d. 3/4O e. 1/3O f. 3

The possible value of the stock at time 1 is Upward movement price, S_u = 12 Upward movement price,…

Answered: Consider the following discrete time…

MATLAB: An Introduction with Applications

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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1. ABC inc. stock is currently selling for $30, one year from today the stock price can either increase by 20% or decrease by 15%. The probability of an increase in the stock price is equal to 0.3. The one-year risk-free rate is 5% What is the value of a European put that expires in one year with an exercise price of $24. 2. Graphically, show the value and the profit and loss of the following butterfly position: Long in a call with an exercise price of $30, short in 2 calls with an exercise price of $45, and long in a call with an exercise price of 60. All calls are written on the same stock and have the same maturity. 3. "Early exercise of an American option on a stock that does not pay any dividend is not optimal regardless of whether the option is a Call or a Put". True, False, or Uncertain. Explain.
An article in Quality Engineering presents viscosity data from a batch chemical process. A sample of these data is in the table. Reading left to right and up to down, draw a time series plot of all the data and comment on any features of the data that are revealed by this plot. Consider that the first 40 observations (the first 4 columns) were generated from a specific process, whereas the last 40 observations were generated from a different process. Does the plot indicate that the two processes generate similar results? Calculate the sample mean and sample variance of the first 40 and the second 40 observations.
Part 1 only solve asap please
Matthew the Barber owns a one-chair shop. At barber college, they told Matthew that his customers would exhibit a Poisson arrival distribution and that he would provide an exponential service distribution. His market survey data indicate that customers arrive at a rate of two per hour. It will take Matthew an average of 20 minutes to give a haircut. Based on these figures, find the following: Part (a): The average number of customers waiting. Part (b): The average time a customer waits. Part (c): The average time a customer is in the shop. Part (d): The average utilization of Matthew's time.
If A, u are the rates of arrival and departure in an M/M/1 queue respectively, give the formula for the probability that there are n customers in the queue at any time in the steady-state.
For a wide sense stationary process: Select one: O a. the covariance is constant O b. all of these O c. the expected value is constant
I need the bull & alternative hypotheses, test statistic, critical value , & conclusion Thankyou so much
4. An insurance company sells an automobile policy with a deductible of one unit. Let X be the amount of the loss having pmf 0.9 f(x) = x = 0 x = 1,2,3,4,5,6 where c is a constant. a) Find c. b) Find the expected value of the amount the insurance company must pay.
X, Y and Z are independent geometric random variables with parameters p1, p2 and p3.a. Find the expected value of the minimum of the three random variables.b. Find the expected value of the second smallest of the three random variables
Consider the rate of return of stocks ABC and XYZ. Year 1 2 SAWN T 3 4 5 FABC 24% 10 17 4 1 ABC XYZ a. Calculate the arithmetic average return on these stocks over the sample period. (Round your answers to 2 decimal places.) rxyz 34% 12 18 1 -9 Arithmetic Average ABC XYZ % % b. Which stock has greater dispersion around the mean return?
Q.2. What is the use of differencing in a time series? Also, explain the importance of stationarity.
A tailor must make 6 of the same size suits for a client. The first suit took 12.8 hours to make and the last suit took 8.8 hours to make. What was the tailor's learning curve % of this run of suits assuming a steady state of production is never reached? Express your answer in % to the nearest 0.1%

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