The share price of the Peston Company can be modelled by a stochastic process with the property that the risk-neutral distributionfor the share price 4 years from now has density functionf(x) ={180-x4050if 90 ≤ x ≤ 180otherwiseSuppose that interest is compounded continuously at nominal rate 4%. Determine the current price of a share of the PestonCompany. Enter your answer correct to the nearest penny, but do not enter the pound sign.Answer:

To determine the current price of a share of the Peston Company, we first used the risk-neutral…

Answered: The share price of the Peston Company…

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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At a one man barber shop, customers arrive according to poison distribution with a mean arrival rate of 5 per hour and hair cutting time was exponentially distributed with an average hair cutting time was exponentially distributed with an average haircut taking 19 minutes. It is assumed that because of excellent reputation, customerswere always willing to wait. Calculate the following a. Average number of customers in the shop and average numbers waiting for a hair cut b .Percentage of time arrival can walk in right without having to wait c. The percentage of customers who have to wait before getting into the barber’s chair
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