Elementary Statistics
12th Edition
ISBN: 9780321836960
Author: Mario F. Triola
Publisher: PEARSON
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Chapter 12, Problem 4CQQ
To determine
To identify: The test statistic in the given output.
To check: Whether the larger test statistics result in larger P-values, smaller P-values, or P-values are unrelated to the value of the test statistic.
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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
d = 0.96. We consider the interest rate r = 4% (over one period). Is this a suitable CRR
model? (Explain your answer.)
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.)
Chapter 12 Solutions
Elementary Statistics
Ch. 12.2 - In Exercises 1-4, use the following listed chest...Ch. 12.2 - Prob. 2BSCCh. 12.2 - In Exercises 1-4, use the following listed chest...Ch. 12.2 - Prob. 4BSCCh. 12.2 - In Exercises 516, use analysis of variance for the...Ch. 12.2 - In Exercises 516, use analysis of variance for the...Ch. 12.2 - Highway Fuel Consumption Data Set 14 in Appendix B...Ch. 12.2 - City Fuel Consumption Data Set 14 in Appendix B...Ch. 12.2 - Head Injury Crash Test Data Exercises 14 use chest...Ch. 12.2 - Pelvis Injury Crash Test Data Exercises 14 use...
Ch. 12.2 - Prob. 11BSCCh. 12.2 - Prob. 12BSCCh. 12.2 - Prob. 13BSCCh. 12.2 - Prob. 14BSCCh. 12.2 - Prob. 15BSCCh. 12.2 - Prob. 16BSCCh. 12.2 - Tukey Test A display of the Bonferroni test...Ch. 12.3 - Prob. 1BSCCh. 12.3 - Prob. 2BSCCh. 12.3 - Prob. 3BSCCh. 12.3 - Prob. 4BSCCh. 12.3 - Prob. 5BSCCh. 12.3 - Car Crash Tests The following table lists results...Ch. 12.3 - Prob. 7BSCCh. 12.3 - Prob. 8BSCCh. 12.3 - Self-Esteem The following table lists measures of...Ch. 12.3 - Prob. 10BSCCh. 12.3 - Prob. 11BBCh. 12 - Measures of Voltage The author measured voltage...Ch. 12 - Prob. 2CQQCh. 12 - Prob. 3CQQCh. 12 - Prob. 4CQQCh. 12 - Prob. 5CQQCh. 12 - Prob. 6CQQCh. 12 - Prob. 7CQQCh. 12 - Prob. 8CQQCh. 12 - Using the same results given in Exercise 8, does...Ch. 12 - Prob. 1RECh. 12 - Prob. 2RECh. 12 - Tar in Cigarettes Data Set 10 in Appendix B...Ch. 12 - Smoking, Body Temperature, Gender The table below...Ch. 12 - Prob. 1CRECh. 12 - Prob. 2CRECh. 12 - Prob. 3CRECh. 12 - Prob. 4CRECh. 12 - In Exercises 1-5, refer to the following list of...Ch. 12 - Freshman 15: Correlation/Regression listed below...Ch. 12 - Platelets: Normal Distribution Based on Data Set 1...Ch. 12 - Job Priority Survey USA Today reported about an...Ch. 12 - Prob. 9CRECh. 12 - Lottery: Goodness-of-Fit The bars in the histogram...Ch. 12 - Prob. 10CQQCh. 12 - Chocolate Chips Revisited The Chapter Problem for...
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