MYLAB MATH COLLEGE ALGEBRA IN CONTEXT
6th Edition
ISBN: 9780135823002
Author: HARSHBARGER
Publisher: PEARSON
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Chapter 1.2, Problem 22E
To determine
To find: The appropriate viewing window and the coordinates of turning points of the function
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For each month of the year, Taylor collected the average high temperatures in Jackson, Mississippi. He used the data to create the histogram shown. Which set of data did he use to create the histogram?
A
55, 60, 64, 72, 73, 75, 77, 81, 83, 91, 91, 92\ 55,\ 60,\ 64,\ 72,\ 73,\ 75,\ 77,\ 81,\ 83,\ 91,\ 91,\ 92 55, 60, 64, 72, 73, 75, 77, 81, 83, 91, 91, 92
B
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In this problem, we consider a Brownian motion (W+) t≥0. We consider a stock model (St)t>0
given (under the measure P) by
d.St 0.03 St dt + 0.2 St dwt,
with So 2. We assume that the interest rate is r = 0.06. The purpose of this problem is to
price an option on this stock (which we name cubic put). This option is European-type, with
maturity 3 months (i.e. T = 0.25 years), and payoff given by
F = (8-5)+
(a) Write the Stochastic Differential Equation satisfied by (St) under the risk-neutral measure
Q. (You don't need to prove it, simply give the answer.)
(b) Give the price of a regular European put on (St) with maturity 3 months and strike K = 2.
(c) Let X =
S. Find the Stochastic Differential Equation satisfied by the process (Xt)
under the measure Q.
(d) Find an explicit expression for X₁ = S3 under measure Q.
(e) Using the results above, find the price of the cubic put option mentioned above.
(f) Is the price in (e) the same as in question (b)? (Explain why.)
Problem 4. Margrabe formula and the Greeks (20 pts)
In the homework, we determined the Margrabe formula for the price of an option allowing you to
swap an x-stock for a y-stock at time T. For stocks with initial values xo, yo, common volatility
σ and correlation p, the formula was given by
Fo=yo (d+)-x0Þ(d_),
where
In (±²
Ꭲ
d+
õ√T
and
σ = σ√√√2(1 - p).
дго
(a) We want to determine a "Greek" for ỡ on the option: find a formula for
θα
(b) Is
дго
θα
positive or negative?
(c) We consider a situation in which the correlation p between the two stocks increases: what
can you say about the price Fo?
(d) Assume that yo< xo and p = 1. What is the price of the option?
Chapter 1 Solutions
MYLAB MATH COLLEGE ALGEBRA IN CONTEXT
Ch. 1.1 - Use the tables below in Exercises 16. 1.Table A...Ch. 1.1 - Use the tables below in Exercises 16. 2.Table B...Ch. 1.1 - Use the tables below in Exercises 16. 3.Use Table...Ch. 1.1 - Use the tables below in Exercises 16. 4.Use Table...Ch. 1.1 - Use the tables below in Exercises 16. 5.Does Table...Ch. 1.1 - Use the tables below in Exercises 16. 6.Does Table...Ch. 1.1 - For each of the functions y = f(x) described...Ch. 1.1 - For each of the functions y = f(x) described...Ch. 1.1 - In Exercises 9 and 10, refer to the graph of the...Ch. 1.1 - Prob. 10E
Ch. 1.1 - If R(x) = 5x + 8, find (a) R(3), (b) R(1), and (c)...Ch. 1.1 - Prob. 12ECh. 1.1 - Does the table below define y as a function of x?...Ch. 1.1 - Prob. 14ECh. 1.1 - Prob. 15ECh. 1.1 - Determine if each graph in Exercises 1518...Ch. 1.1 - Prob. 17ECh. 1.1 - Determine if each graph in Exercises 1518...Ch. 1.1 - Determine whether the graph in the figure...Ch. 1.1 - Prob. 20ECh. 1.1 - Which of the following sets of ordered pairs...Ch. 1.1 - Which of the following sets of ordered pairs...Ch. 1.1 - Which of the following arrow diagrams defines a...Ch. 1.1 - Which of the following arrow diagrams defines a...Ch. 1.1 - In Exercises 2530, find the domain and range for...Ch. 1.1 - In Exercises 2530, find the domain and range for...Ch. 1.1 - In Exercises 2530, find the domain and range for...Ch. 1.1 - In Exercises 2530, find the domain and range for...Ch. 1.1 - In Exercises 2530, find the domain and range for...Ch. 1.1 - In Exercises 2530, find the domain and range for...Ch. 1.1 - If a model has inputs aligned so that X = the...Ch. 1.1 - If a set of data from the years 1990 to 2015 is...Ch. 1.1 - Does x2 + y2 = 4 describe y as a function of x?Ch. 1.1 - Does x2 + 2y = 9 descrbelas a function of x?Ch. 1.1 - The American Lung Association distributes a...Ch. 1.1 - Write an equation to represent the function...Ch. 1.1 - Say F represents a Fahrenheit temperature and C...Ch. 1.1 - Write a verbal statement to represent the function...Ch. 1.1 - In Exercises 3941, determine whether the given...Ch. 1.1 - In Exercises 3941, determine whether the given...Ch. 1.1 - In Exercises 3941, determine whether the given...Ch. 1.1 - Prob. 42ECh. 1.1 - Barcodes A grocery scanner at Safeway connects the...Ch. 1.1 - Piano A childs piano has 12 keys, each of which...Ch. 1.1 - Prob. 45ECh. 1.1 - Prob. 46ECh. 1.1 - Prob. 47ECh. 1.1 - Prob. 48ECh. 1.1 - Prob. 49ECh. 1.1 - Mortgage A couple can afford 800 per month to...Ch. 1.1 - Prob. 51ECh. 1.1 - Working Age The projected ratio of the working-age...Ch. 1.1 - Age at First Marriage The table on the following...Ch. 1.1 - Population of Females under 18 The graph below...Ch. 1.1 - Alzheimers Disease The figure gives the millions...Ch. 1.1 - Prob. 56ECh. 1.1 - Prob. 57ECh. 1.1 - Social Security Funding Social Security benefits...Ch. 1.1 - Prob. 59ECh. 1.1 - Prob. 60ECh. 1.1 - Utilities An electric utility company determines...Ch. 1.1 - Prob. 62ECh. 1.1 - Prob. 63ECh. 1.1 - Projectiles Suppose a ball thrown into the air has...Ch. 1.1 - Test Reliability If a test that has reliability...Ch. 1.1 - Body-Heat Loss The description of body-heat loss...Ch. 1.1 - Prob. 67ECh. 1.1 - Prob. 68ECh. 1.1 - Prob. 69ECh. 1.1 - Height of a Bullet The height of a bullet shot...Ch. 1.2 - a.Complete the table of values for the function y...Ch. 1.2 - Prob. 2ECh. 1.2 - Prob. 3ECh. 1.2 - In Exercises 38, make a table of values for each...Ch. 1.2 - In Exercises 38, make a table of values for each...Ch. 1.2 - Prob. 6ECh. 1.2 - Prob. 7ECh. 1.2 - Prob. 8ECh. 1.2 - Prob. 9ECh. 1.2 - Prob. 10ECh. 1.2 - Prob. 11ECh. 1.2 - Prob. 12ECh. 1.2 - Prob. 13ECh. 1.2 - Prob. 14ECh. 1.2 - Prob. 15ECh. 1.2 - Prob. 16ECh. 1.2 - For Exercises 1518, graph the given function with...Ch. 1.2 - Prob. 18ECh. 1.2 - Prob. 19ECh. 1.2 - For Exercises 1922, find an appropriate viewing...Ch. 1.2 - Prob. 21ECh. 1.2 - Prob. 22ECh. 1.2 - Prob. 23ECh. 1.2 - Prob. 24ECh. 1.2 - Prob. 25ECh. 1.2 - Prob. 26ECh. 1.2 - Prob. 27ECh. 1.2 - Prob. 28ECh. 1.2 - Prob. 29ECh. 1.2 - Prob. 30ECh. 1.2 - Suppose f(x)=x25x million dollars are earned,...Ch. 1.2 - Prob. 32ECh. 1.2 - Prob. 33ECh. 1.2 - Prob. 34ECh. 1.2 - In Exercises 3338, plot the graphs by hand....Ch. 1.2 - In Exercises 3338, plot the graphs by hand....Ch. 1.2 - Prob. 37ECh. 1.2 - Prob. 38ECh. 1.2 - Prob. 39ECh. 1.2 - Prob. 40ECh. 1.2 - Prob. 41ECh. 1.2 - Prob. 42ECh. 1.2 - Prob. 43ECh. 1.2 - Life Expectancy at 65 Using data for selected...Ch. 1.2 - Student Loans Data for selected years from 2011...Ch. 1.2 - Prob. 46ECh. 1.2 - Prob. 47ECh. 1.2 - Prob. 48ECh. 1.2 - Obesity Using data from 2000 and projected to...Ch. 1.2 - Cocaine Use The percent of high school seniors...Ch. 1.2 - Prob. 51ECh. 1.2 - Prob. 52ECh. 1.2 - Prob. 53ECh. 1.2 - Prob. 54ECh. 1.2 - Prob. 55ECh. 1.2 - Prob. 56ECh. 1.3 - Which of the following functions are linear?...Ch. 1.3 - Is the graph in the figure below a function?Ch. 1.3 - Find the slope of the line through (4, 6) and (28,...Ch. 1.3 - Find the slope of the line through (8, 10) and (8,...Ch. 1.3 - Find the slope of the line in the graph that...Ch. 1.3 - Find the slope of the line in the graph below.Ch. 1.3 - In Exercises 710, (a) find the x- and y-intercepts...Ch. 1.3 - In Exercises 710, (a) find the x- and y-intercepts...Ch. 1.3 - In Exercises 710, (a) find the x- and y-intercepts...Ch. 1.3 - In Exercises 710, (a) find the x- and y-intercepts...Ch. 1.3 - If a line is horizontal, then its slope is _____....Ch. 1.3 - Describe the line whose slope was determined in...Ch. 1.3 - For Exercises 1314, determine whether the slope of...Ch. 1.3 - For Exercises 1314, determine whether the slope of...Ch. 1.3 - For Exercises 1518, (a) give the slope of the line...Ch. 1.3 - For Exercises 1518, (a) give the slope of the line...Ch. 1.3 - For Exercises 1518, (a) give the slope of the line...Ch. 1.3 - For Exercises 1518, (a) give the slope of the line...Ch. 1.3 - For each of the functions in Exercises 1921, do...Ch. 1.3 - For each of the functions in Exercises 1921, do...Ch. 1.3 - Prob. 21ECh. 1.3 - Prob. 22ECh. 1.3 - Prob. 23ECh. 1.3 - Prob. 24ECh. 1.3 - Prob. 25ECh. 1.3 - Prob. 26ECh. 1.3 - Prob. 27ECh. 1.3 - Prob. 28ECh. 1.3 - Prob. 29ECh. 1.3 - Prob. 30ECh. 1.3 - Prob. 31ECh. 1.3 - Prob. 32ECh. 1.3 - College Enrollment The total fall enrollment in...Ch. 1.3 - Women in the Workforce Using data and projections...Ch. 1.3 - Life Expectancy at 65 Using data for selected...Ch. 1.3 - Prob. 36ECh. 1.3 - Prob. 37ECh. 1.3 - Prob. 38ECh. 1.3 - Prob. 39ECh. 1.3 - Prob. 40ECh. 1.3 - Life Insurance The monthly rates for a 100,000...Ch. 1.3 - Prob. 42ECh. 1.3 - Prob. 43ECh. 1.3 - Prob. 44ECh. 1.3 - Women in the Workforce Using data from 1950 and...Ch. 1.3 - Prob. 46ECh. 1.3 - Prob. 47ECh. 1.3 - Prob. 48ECh. 1.3 - Prob. 49ECh. 1.3 - Wireless Service Spending The total amount spent...Ch. 1.3 - Prob. 51ECh. 1.3 - Internet Users The percent of the U.S. population...Ch. 1.3 - Depreciation Suppose the cost of a business...Ch. 1.3 - Prob. 54ECh. 1.3 - Prob. 55ECh. 1.3 - Prob. 56ECh. 1.3 - Prob. 57ECh. 1.3 - Marginal Cost Suppose the monthly total cost for...Ch. 1.3 - Prob. 59ECh. 1.3 - Prob. 60ECh. 1.3 - Prob. 61ECh. 1.3 - Prob. 62ECh. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 118, write the equation of the line...Ch. 1.4 - For Exercises 1922, write the equation of the line...Ch. 1.4 - For Exercises 1922, write the equation of the line...Ch. 1.4 - For Exercises 1922, write the equation of the line...Ch. 1.4 - For Exercises 1922, write the equation of the line...Ch. 1.4 - Write the equation of a function if its rate of...Ch. 1.4 - Write the equation of a function if its rate of...Ch. 1.4 - If a function has rate of change 23 and y = 9,...Ch. 1.4 - If a function has rate of change 15 and y = 12...Ch. 1.4 - Prob. 27ECh. 1.4 - Prob. 28ECh. 1.4 - For the function shown in the figure, find the...Ch. 1.4 - Prob. 30ECh. 1.4 - Prob. 31ECh. 1.4 - Prob. 32ECh. 1.4 - Prob. 33ECh. 1.4 - Prob. 34ECh. 1.4 - For the functions given in Exercises 3336, find...Ch. 1.4 - For the functions given in Exercises 3336, find...Ch. 1.4 - Prob. 37ECh. 1.4 - Prob. 38ECh. 1.4 - Prob. 39ECh. 1.4 - Prob. 40ECh. 1.4 - Prob. 41ECh. 1.4 - Sleep Each day a young person should sleep 8 hours...Ch. 1.4 - Prob. 43ECh. 1.4 - Heart Rate The desired heart rate for cardiac...Ch. 1.4 - Prob. 45ECh. 1.4 - Prob. 46ECh. 1.4 - Prob. 47ECh. 1.4 - Prob. 48ECh. 1.4 - Prob. 49ECh. 1.4 - Cost A company buys and retails baseball caps. The...Ch. 1.4 - Prob. 51ECh. 1.4 - Prob. 52ECh. 1.4 - Social Security Monthly social security benefits...Ch. 1.4 - Consumer Price Index Goods and services that cost...Ch. 1.4 - Prob. 55ECh. 1.4 - Blood Alcohol Percent The table below gives the...Ch. 1.4 - Prob. 57ECh. 1.4 - World Population The figure shows the real and...Ch. 1.4 - Prob. 59ECh. 1.4 - Prob. 60ECh. 1.4 - Women in the Workforce The number of women in the...Ch. 1.4 - Prob. 62ECh. 1.4 - Prison Population The graph showing the total...Ch. 1.4 - Investment The graph of the future value of an...Ch. 1.4 - Working Age The scatter plot below projects the...Ch. 1.4 - Women in the Workforce The number of women in the...Ch. 1.4 - Prob. 67ECh. 1.4 - Social Agency A social agency provides emergency...Ch. 1.4 - Average Velocity A ball is shot straight upward,...Ch. 1.4 - Prob. 70ECh. 1.4 - Prob. 71ECh. 1.4 - Prob. 72ECh. 1 - Write the set of all natural numbers N less than 9...Ch. 1 - Is it true that 3{1,3,4,6,8,9,10}?Ch. 1 - Prob. 3TECh. 1 - Prob. 4TECh. 1 - Prob. 5TECh. 1 - Are sets of rational numbers and irrational...Ch. 1 - Prob. 7TECh. 1 - Prob. 8TECh. 1 - Identify the sets of numbers in Exercises 79 as...Ch. 1 - Prob. 10TECh. 1 - Prob. 11TECh. 1 - Prob. 12TECh. 1 - Prob. 13TECh. 1 - Prob. 14TECh. 1 - In Exercises 1315, express each inequality or...Ch. 1 - Prob. 16TECh. 1 - Prob. 17TECh. 1 - Prob. 18TECh. 1 - Prob. 19TECh. 1 - Prob. 20TECh. 1 - Prob. 21TECh. 1 - Prob. 22TECh. 1 - Plot the points (x1, y1) and (x2, y2) on a...Ch. 1 - Prob. 24TECh. 1 - Determine whether each expression in Exercises...Ch. 1 - Prob. 26TECh. 1 - Prob. 27TECh. 1 - Prob. 28TECh. 1 - Prob. 29TECh. 1 - Prob. 30TECh. 1 - Prob. 31TECh. 1 - Prob. 32TECh. 1 - Prob. 33TECh. 1 - Prob. 34TECh. 1 - Prob. 35TECh. 1 - Prob. 36TECh. 1 - Prob. 37TECh. 1 - Prob. 38TECh. 1 - Prob. 39TECh. 1 - In Exercises 3842, find the products....Ch. 1 - Prob. 41TECh. 1 - Prob. 42TECh. 1 - Prob. 43TECh. 1 - Prob. 44TECh. 1 - Prob. 1RECh. 1 - Prob. 2RECh. 1 - Prob. 3RECh. 1 - Prob. 4RECh. 1 - Prob. 5RECh. 1 - Prob. 6RECh. 1 - Prob. 7RECh. 1 - Graph the function y = 3x2.Ch. 1 - Prob. 9RECh. 1 - Prob. 10RECh. 1 - Prob. 11RECh. 1 - Prob. 12RECh. 1 - Prob. 13RECh. 1 - Prob. 14RECh. 1 - Prob. 15RECh. 1 - Prob. 16RECh. 1 - Prob. 17RECh. 1 - Prob. 18RECh. 1 - Prob. 19RECh. 1 - Prob. 20RECh. 1 - Prob. 21RECh. 1 - Prob. 22RECh. 1 - Prob. 23RECh. 1 - Prob. 24RECh. 1 - Prob. 25RECh. 1 - Prob. 26RECh. 1 - Prob. 27RECh. 1 - Prob. 28RECh. 1 - Prob. 29RECh. 1 - Prob. 30RECh. 1 - Prob. 31RECh. 1 - Life Expectancy The figure gives the number of...Ch. 1 - Life Expectancy The figure gives the number of...Ch. 1 - Prob. 34RECh. 1 - Prob. 35RECh. 1 - Prob. 36RECh. 1 - Prob. 37RECh. 1 - Prob. 38RECh. 1 - Prob. 39RECh. 1 - Prob. 40RECh. 1 - Depreciation A business property can be...Ch. 1 - Marginal Profit A company has determined that its...
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