INTRODUCTORY STATISTICS (LOOSELEAF)
3rd Edition
ISBN: 9780135163146
Author: Gould
Publisher: PEARSON
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Chapter 11, Problem 55CRE
Actual Percentage to Charity Professors of ethics (Eth), professors of philosophy (Phil), and professors in fields other than philosophy or ethics (Other) were asked what percentage of income they actually donated to charity. Assume the professors are randomly sampled. The data are at this text’s website. Ethicists tend to believe that a greater amount of money should be given to charity than do the other two groups. And so we wish to know whether ethicists tend to contribute more money to charity than professors in other fields. As a first step, determine whether the
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Would you please help with these questions? I don't understand when to choose a bar chart and pie chart, and question 3 , thank you
Question 2. An American option on a stock has payoff given by F = f(St) when it is exercised
at time t. We know that the function f is convex. A person claims that because of convexity,
it is optimal to exercise at expiration T. Do you agree with them?
Question 4. We consider a CRR model with So == 5 and up and down factors u = 1.03 and
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Chapter 11 Solutions
INTRODUCTORY STATISTICS (LOOSELEAF)
Ch. 11 - In Exercises 11.1 and 11.2, for each situation,...Ch. 11 - In Exercises 11.1 and 11.2, for each situation,...Ch. 11 - Bonferroni Correction (Example 1) Suppose you have...Ch. 11 - Prob. 4SECh. 11 - Apartment Rents Random samples of rents for...Ch. 11 - Prob. 6SECh. 11 - Gas Prices The website Gasbuddy.com reports the...Ch. 11 - More Gas Prices The following table shows the...Ch. 11 - Prob. 9SECh. 11 - Prob. 10SE
Ch. 11 - Gas Price Intervals Use the data from exercise...Ch. 11 - Gas Price Intervals Use the data from exercise...Ch. 11 - Prob. 13SECh. 11 - Baseball Position and Hits Use the data in the...Ch. 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 - Gas Price ANOVA Based on the following output,...Ch. 11 - Apartment Rents (Example 7) Samples of rents for...Ch. 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 - Prob. 47SECh. 11 - Tomatoes Use the data given in exercise 11.36....Ch. 11 - Concern over Nuclear Power Following the...Ch. 11 - Social Media Use A StatCrunch survey asked...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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- Question 3. We want to price a put option with strike price K and expiration T. Two financial advisors estimate the parameters with two different statistical methods: they obtain the same return rate μ, the same volatility σ, but the first advisor has interest r₁ and the second advisor has interest rate r2 (r1>r2). They both use a CRR model with the same number of periods to price the option. Which advisor will get the larger price? (Explain your answer.)arrow_forwardQuestion 5. We consider a put option with strike price K and expiration T. This option is priced using a 1-period CRR model. We consider r > 0, and σ > 0 very large. What is the approximate price of the option? In other words, what is the limit of the price of the option as σ∞. (Briefly justify your answer.)arrow_forwardQuestion 6. You collect daily data for the stock of a company Z over the past 4 months (i.e. 80 days) and calculate the log-returns (yk)/(-1. You want to build a CRR model for the evolution of the stock. The expected value and standard deviation of the log-returns are y = 0.06 and Sy 0.1. The money market interest rate is r = 0.04. Determine the risk-neutral probability of the model.arrow_forward
- Several markets (Japan, Switzerland) introduced negative interest rates on their money market. In this problem, we will consider an annual interest rate r < 0. We consider a stock modeled by an N-period CRR model where each period is 1 year (At = 1) and the up and down factors are u and d. (a) We consider an American put option with strike price K and expiration T. Prove that if <0, the optimal strategy is to wait until expiration T to exercise.arrow_forwardWe consider an N-period CRR model where each period is 1 year (At = 1), the up factor is u = 0.1, the down factor is d = e−0.3 and r = 0. We remind you that in the CRR model, the stock price at time tn is modeled (under P) by Sta = So exp (μtn + σ√AtZn), where (Zn) is a simple symmetric random walk. (a) Find the parameters μ and σ for the CRR model described above. (b) Find P Ste So 55/50 € > 1). StN (c) Find lim P 804-N (d) Determine q. (You can use e- 1 x.) Ste (e) Find Q So (f) Find lim Q 004-N StN Soarrow_forwardIn this problem, we consider a 3-period stock market model with evolution given in Fig. 1 below. Each period corresponds to one year. The interest rate is r = 0%. 16 22 28 12 16 12 8 4 2 time Figure 1: Stock evolution for Problem 1. (a) A colleague notices that in the model above, a movement up-down leads to the same value as a movement down-up. He concludes that the model is a CRR model. Is your colleague correct? (Explain your answer.) (b) We consider a European put with strike price K = 10 and expiration T = 3 years. Find the price of this option at time 0. Provide the replicating portfolio for the first period. (c) In addition to the call above, we also consider a European call with strike price K = 10 and expiration T = 3 years. Which one has the highest price? (It is not necessary to provide the price of the call.) (d) We now assume a yearly interest rate r = 25%. We consider a Bermudan put option with strike price K = 10. It works like a standard put, but you can exercise it…arrow_forward
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