MATLAB: AN INTRODUCTION WITH APPLICATIO
6th Edition
ISBN: 9781119626596
Author: GILAT
Publisher: WILEY
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Chapter 1, Problem 12P
Define two variables: alpha =
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We consider a one-period market with the following properties: the current stock priceis S0 = 4. At time T = 1 year, the stock has either moved up to S1 = 8 (with probability0.7) or down towards S1 = 2 (with probability 0.3). We consider a call option on thisstock with maturity T = 1 and strike price K = 5. The interest rate on the money marketis 25% yearly.(a) Find the replicating portfolio (φ, ψ) corresponding to this call option.(b) Find the risk-neutral (no-arbitrage) price of this call option.(c) We now consider a put option with maturity T = 1 and strike price K = 3 onthe same market. Find the risk-neutral price of this put option. Reminder: A putoption gives you the right to sell the stock for the strike price K.1(d) An investor with initial capital X0 = 0 wants to invest on this market. He buysα shares of the stock (or sells them if α is negative) and buys β call options (orsells them is β is negative). He invests the cash balance on the money market (orborrows if the amount is…
Determine if the two statements are equivalent using a truth table
Question 4: Determine if pair of statements A and B are equivalent or not, using truth table.
A. (~qp)^~q
в. р л~9
Chapter 1 Solutions
MATLAB: AN INTRODUCTION WITH APPLICATIO
Ch. 1 - Prob. 1PCh. 1 - Calculate: (a) 8+802.6+e3.53 (b)...Ch. 1 - Calculate: (a) 23+453160.7+log10589006 (b)...Ch. 1 - Calculate: (a) 3.822.754125+5.2+1.853.5 (b)...Ch. 1 - Calculate: (a)sin0.2cos/6+tan72 (b)...Ch. 1 - Define the varialbe z as z = 4.5; than evaluate:...Ch. 1 - Define the variable t as t= 3.2; then evalute: (a)...Ch. 1 - Define the variable xandy as x = 6.5 and y = 3.8;...Ch. 1 - Define the variables a, b, c, and d as: c= 4.6, d...Ch. 1 - Two trigonometric identities are given by: (a)...
Ch. 1 - Two trigonometric identities are given by: (a)...Ch. 1 - Define two variables: alpha =8, and beta = 6....Ch. 1 - Given: x2cosxdx=2xcosx+x22sinx . Use MATLAB to...Ch. 1 - A rectangular box has the dimensions shown. (a)...Ch. 1 - The are length of a segment of a parabola ABC is...Ch. 1 - The three shown circles, with radius 15 in., 10.5...Ch. 1 - A frustum of cone is filled with ice cream such...Ch. 1 - 18. In the triangle shown a =27 in., b 43 in.,...Ch. 1 - For the triangle shown, a = 72°, ß=43°, and its...Ch. 1 - The distance d from a point P (xp,yp,zp) to the...Ch. 1 - The perimeter of an ellipse can be approximated...Ch. 1 - A total of 4217 eggs have w be packed in boxes...Ch. 1 - A total of 777 people have to be transported using...Ch. 1 - Change the display to format long g. Assign the...Ch. 1 - The voltage difference Vabbetween points a and b...Ch. 1 - The current in a series RCL circuit is given by:...Ch. 1 - The monthly payment M of a mortgage P for n years...Ch. 1 - The number of permutations nProf taking r Objects...Ch. 1 - The number of combinations Cn,r of taking r...Ch. 1 - The equivalent resistance of two resistors R1and...Ch. 1 - The output voltage Voutin the circuit shown is...Ch. 1 - Radioactive decay of carbon-14 is used for...Ch. 1 - The greatest common divisor is the largest...Ch. 1 - The amount of energy E (in joules) that is...Ch. 1 - According to the Doppler effect of light, the...Ch. 1 - Newton’s law of cooling gives the temperature T(t)...Ch. 1 - The velocity v and the falling distance d as a...Ch. 1 - Use the Help Window to find a display format that...Ch. 1 - Gosper’s approximation for factorials is given by:...Ch. 1 - According to Newton’s law of universal...
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- Determine if the two statements are equalivalent using a truth tablearrow_forwardQuestion 3: p and q represent the following simple statements. p: Calgary is the capital of Alberta. A) Determine the value of each simple statement p and q. B) Then, without truth table, determine the va q: Alberta is a province of Canada. for each following compound statement below. pvq р^~q ~рл~q ~q→ p ~P~q Pq b~ (d~ ← b~) d~ (b~ v d) 0 4arrow_forward2. Let X be a random variable. (a) Show that, if E X2 = 1 and E X4arrow_forward1. Show that, for any non-negative random variable X, EX+E+≥2, X E max X. 21.arrow_forwarda small pond contains eight catfish and six bluegill. If seven fish are caught at random, what is the probability that exactly five catfish have been caught?arrow_forward23 The line graph in the following figure shows Revenue ($ millions) one company's revenues over time. Explain why this graph is misleading and what you can do to fix the problem. 700 60- 50- 40 30 Line Graph of Revenue 20- 101 1950 1970 1975 1980 1985 Year 1990 2000arrow_forwardd of the 20 respectively. Interpret the shape, center and spread of the following box plot. 14 13 12 11 10 6 T 89 7 9 5. 治arrow_forwardF Make a box plot from the five-number summary: 100, 105, 120, 135, 140. harrow_forward14 Is the standard deviation affected by skewed data? If so, how? foldarrow_forwardFrequency 15 Suppose that your friend believes his gambling partner plays with a loaded die (not fair). He shows you a graph of the outcomes of the games played with this die (see the following figure). Based on this graph, do you agree with this person? Why or why not? 65 Single Die Outcomes: Graph 1 60 55 50 45 40 1 2 3 4 Outcome 55 6arrow_forwardlie y H 16 The first month's telephone bills for new customers of a certain phone company are shown in the following figure. The histogram showing the bills is misleading, however. Explain why, and suggest a solution. Frequency 140 120 100 80 60 40 20 0 0 20 40 60 80 Telephone Bill ($) 100 120arrow_forward25 ptical rule applies because t Does the empirical rule apply to the data set shown in the following figure? Explain. 2 6 5 Frequency 3 сл 2 1 0 2 4 6 8 00arrow_forwardarrow_back_iosSEE MORE QUESTIONSarrow_forward_ios
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