1i=1_1+0;Suppose you have a sporting event with m different outcomes for which the odds satisfy 1 < 1. Which of thefollowing statements are true?There exists an arbitrage opportunity in this case.b. There exist risk-neutral probabilities in this case.There is no risk-free profit here, you always have to take some risk in order to win.d. It is possible to construct a betting strategy that produces the constant profit £1 whatever the outcome i.It is possible to construct a betting strategy that produces the constant profit £2 whatever the outcome i.a.C.e.

Arbitrage opportunity exists if there is a way to guarantee a profit regardless of the outcome by…

Answered: Suppose you have a sporting event with…

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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Suppose that Trendy Inc. products a style of a seasonal business suit, Sit-T-Slicker, which has a cost of $500 per unit. The demand during the season for Sit-T-Slicker is generally unknown and could be either: 200, 500, 800, 1100, and 1500 units with equal probabilities. Trendy sells the Sit-T-Slicker suit for $900 per unit during its three-month season, and for $300 per unit when sold after that time. Given the above data, what is the optimal order quantity for the Sit-T-Slicker? What is expected profit? Suppose the probabilities in part a change to 0.05, 0.25, 0.40, 0.25, 0.05 for demand levels 200, 500, 800, 1100, 1500, respectively. What is the optimal order quantity and expected profit in this case? How would better information regarding the demand for the Sit-T-Slicker suit change the data provided in this problem? How would this information affect the answers to part a? Explain.
Can you do a, b, c?
You purchase a brand new car for $15,000 and insure it. The policy pays 78% of the car's value if there is an issue with the engine or 30% of the car's value if there is an issue with the speaker system. The probability of an issue with the engine is 0.009, and the probability there is an issue with the speaker system is 0.02. The premium for the policy is p. Let X be the insurance company's net gain from this policy. (a) Create a probability distribution for X, using p to represent the premium on the policy. Enter the possible values of X in ascending order from left to right. P(X) (b) Compute the minimum amount the insurance company will charge for this policy. Round your answer to the nearest cent
When it is sunny, Joe's ice cream truck generates a profit of $547 per day, when it is not sunny, the profit is $250 per day, and when the truck is not out there selling ice cream, Joe loses $120 per day. Suppose 8% of a year Joe's truck is on vacation, and 86% of a year the truck is selling ice cream on sunny days, what is the expected daily profit the truck generates over a year? Enter answer as a decimal rounded to TWO digits after the decimal point.
A payoff table is given as S1 S2 S3 D1 250 750 500 D2 300 -250 1200 D3 500 500 600 a. What choice should be made by the optimistic decision maker? b. What choice should be made by the conservative decision maker? c. What decision should be made under minimax regret? d. If the probabilities of d1, d2, and d3 are .2, .5, and .3 respectively, then what choice should be made under expected value?
iv. Find the probability that the water pollution is present given that the water is sole for fishing and the sample water was not found polluted.I need answer for this thank you
Leah is flying from Moncton to Vancouver with connection in Montreal. The proba- bility that her first flight leaves on time is 0.15. If the flight is on time, the probability that her luggage will make the connecting flight in Montreal is 0.95, but if the first is Practice q # 25 p.197 delayed, the probability that the luggage will make it is only 0.65. chap 7 Are the first flight leaving on time and the luggage making the connection independent events? Explain. What is the probability that Leah's luggage arrives in Vancouver with a. b. her?
For each set of probabilities, determine whether the events A and B are independent or dependent. (If necessary, consult a list of formulas.) Probabilities Independent Dependent = P(A 18) - 1 (a) P(A)=-;P(B) =;P(A\B) = 5 1 1 P(A) =;P (B) = P(A and B) = %3D 4 6. 1 1 P (B|A) = 1 (c) P(4)-극: P(B)-P(Bl4): %3D %3D 1 1 (d) P(A) = : P(B) = P(4 |B) = | %3D

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