Pearson eText for Basic Business Statistics -- Instant Access (Pearson+)
Pearson eText for Basic Business Statistics -- Instant Access (Pearson+)
14th Edition
ISBN: 9780137400119
Author: MARK BERENSON, David Levine
Publisher: PEARSON+
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Chapter 11, Problem 14PS

A transportation strategist wanted to compare the traffic congestion levels across four continents: Asia, Europe, North America, and South America. The file CongestionLevel contains congestion level, defined as the increase   % in overall travel time when compared to a free flow situation (an uncongested situation) for 10 cities in each continent.

a. At the 0.05 level of signification, is there evidence of a difference in the mean congestion level across continents?

b. if the results in (a) indicate that it is appropriate to do so, use the Tukey-Kramer procedure to determine which contains differ in congestion level

c. What assumption are necessary in (a)?

d. At the 0.05 level of significance, is there evidence of a difference in the variation of the congestion level across continents?

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Note: The purpose of this problem below is to use computational techniques (Excelspreadsheet, Matlab, R, Python, etc.) and code the dynamic programming ideas seen inclass. Please provide the numerical answer to the questions as well as a sample of yourwork (spreadsheet, code file, etc.).We consider an N-period binomial model with the following properties: N = 60, thecurrent stock price is S0 = 1000; on each period, the stock price increases by 0.5% whenit moves up and decreases by 0.3% when it moves down. The annual interest rate on themoney market is 5%. (Notice that this model is a CRR model, which means that thebinomial tree is recombining.)(a) Find the price at time t0 = 0 of a (European) call option with strike price K = 1040and maturity T = 1 year.(b) Find the price at time t0 = 0 of a (European) put option with strike price K = 1040and maturity T = 1 year.(c) We consider now, that you are at time t5 (i.e. after 5 periods, which represents 1month later). Assume that the stock…
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