Ten Lessons in Introductory Sociology
Ten Lessons in Introductory Sociology
2nd Edition
ISBN: 9780190663872
Author: Kenneth A. Gould; Tammy L. Lewis
Publisher: Oxford University Press Academic US
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Chapter 11, Problem 45SE

Reaction Distances Use the data given in exercise 11.35. Follow the instructions given in exercise 11.43.

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Problem 1.We consider a two-period binomial model with the following properties: each period lastsone (1) year and the current stock price is S0 = 4. On each period, the stock price doubleswhen it moves up and is reduced by half when it moves down. The annual interest rateon the money market is 25%.  We consider four options on this market:ˆ A European call option with maturity T = 2 years and strike price K = 5;ˆ A European put option with maturity T = 2 years and strike price K = 5;ˆ An American call option with maturity T = 2 years and strike price K = 5;ˆ An American put option with maturity T = 2 years and strike price K = 5.(a) Find the price at time 0 of both European options.(b) Find the price at time 0 of both American options. Compare your results with (a)and comment.(c) For each of the American options, describe the optimal exercising strategy.(d) We assume that you sell the American put to a market participant A for the pricefound in (b). Explain how you act on the market…
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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…

Chapter 11 Solutions

Ten Lessons in Introductory Sociology

Ch. 11 - Gas Price Intervals Use the data from exercise...Ch. 11 - Gas Price Intervals Use the data from exercise...Ch. 11 - Work Hours and Education The table shows the...Ch. 11 - Prob. 14SECh. 11 - Comparing F -Values from Boxplots (Example 3)...Ch. 11 - Comparing F -Values from Boxplots Refer to the...Ch. 11 - Marital Status and Cholesterol (Example 4) Refer...Ch. 11 - Marital Status and Blood Pressure Test the...Ch. 11 - Schoolwork and Class (Example 5) A random survey...Ch. 11 - TV Hours A random survey was done at a small...Ch. 11 - Schoolwork and Class Use the information for...Ch. 11 - TV Hours Use the information for exercise 11.20....Ch. 11 - Schoolwork Again Go back to the information in...Ch. 11 - TV Hours Again Go back to the information in...Ch. 11 - Pulse Rates (Example 6) Pulse rates were taken for...Ch. 11 - UCLA Music Survey The figure shows side-by-side...Ch. 11 - Commute Times by Method A survey was given to...Ch. 11 - Prob. 30SECh. 11 - Prob. 31SECh. 11 - Study Hours by Major Three independent random...Ch. 11 - Salary by Type of College Information was gathered...Ch. 11 - Draft Lottery When the draft lottery for military...Ch. 11 - Reaction Times for Athletes A random sample of...Ch. 11 - Tomato Plants and Colored Light Jennifer Brogan, a...Ch. 11 - GPAs by Seating Choice A random sample of students...Ch. 11 - Reading Comprehension Sixty-six reading students...Ch. 11 - Hours of Steep and Health Status In a study done...Ch. 11 - Happiness and Age Category StatCrunch surveyed...Ch. 11 - Prob. 41SECh. 11 - House Prices Tukey HSD confidence intervals (with...Ch. 11 - GPA and Row (Example 8) A random sample of...Ch. 11 - Reading Scores by Teaching Method Refer to...Ch. 11 - Reaction Distances Use the data given in exercise...Ch. 11 - Study Hours Use the data given in exercise 11.32....Ch. 11 - Baseball Player Run-Times (Example 9) Determine...Ch. 11 - Tomatoes Use the data given in exercise 11.36....Ch. 11 - Concern over Nuclear Power Following the...Ch. 11 - Immigration Issue A survey was done by StatCrunch...Ch. 11 - Happiness and Age Consider the data from the...Ch. 11 - GPA and Row Number Suppose you collect data on...Ch. 11 - Contacting Mother Professors of ethics (Eth),...Ch. 11 - Ideal Percentage to Charity Professors of ethics...Ch. 11 - Actual Percentage to Charity Professors of ethics...Ch. 11 - Hours of Television by Age Group The StatCrunch...Ch. 11 - Triglycerides and Gender Using the NHANES data, we...Ch. 11 - Cholesterol and Gender Using NHANES data, we...

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