EBK NUMERICAL ANALYSIS
10th Edition
ISBN: 9781305465350
Author: BURDEN
Publisher: YUZU
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Chapter 1.2, Problem 4DQ
Discuss the difference between a number written in standard notation and one that is written in normalized decimal floating-point form. Provide several examples.
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Chapter 1 Solutions
EBK NUMERICAL ANALYSIS
Ch. 1.1 - Show that the following equations have at least...Ch. 1.1 - Show that the following equations have at least...Ch. 1.1 - Find intervals containing solutions to the...Ch. 1.1 - Find intervals containing solutions to the...Ch. 1.1 - Find maxaxb |f(x)| for the following functions and...Ch. 1.1 - Find maxaxb | f(x)| for the following functions...Ch. 1.1 - Show that f(x) is 0 at least once in the given...Ch. 1.1 - Suppose f C[a, b] and f (x) exists on (a, b)....Ch. 1.1 - Let f(x) = x3. a. Find the second Taylor...Ch. 1.1 - Find the third Taylor polynomial P3(x) for the...
Ch. 1.1 - Find the second Taylor polynomial P2(x) for the...Ch. 1.1 - Repeat Exercise 11 using x0 = /6. 11. Find the...Ch. 1.1 - Prob. 13ESCh. 1.1 - Prob. 14ESCh. 1.1 - Prob. 15ESCh. 1.1 - Use the error term of a Taylor polynomial to...Ch. 1.1 - Use a Taylor polynomial about /4 to approximate...Ch. 1.1 - Let f(x) = (1 x)1 and x0 = 0. Find the nth Taylor...Ch. 1.1 - Let f(x) = ex and x0 = 0. Find the nth Taylor...Ch. 1.1 - Prob. 20ESCh. 1.1 - The polynomial P2(x)=112x2 is to be used to...Ch. 1.1 - Use the Intermediate Value Theorem 1.11 and Rolles...Ch. 1.1 - Prob. 23ESCh. 1.1 - In your own words, describe the Lipschitz...Ch. 1.2 - Compute the absolute error and relative error in...Ch. 1.2 - Compute the absolute error and relative error in...Ch. 1.2 - Prob. 3ESCh. 1.2 - Find the largest interval in which p must lie to...Ch. 1.2 - Perform the following computations (i) exactly,...Ch. 1.2 - Use three-digit rounding arithmetic to perform the...Ch. 1.2 - Use three-digit rounding arithmetic to perform the...Ch. 1.2 - Repeat Exercise 7 using four-digit rounding...Ch. 1.2 - Repeat Exercise 7 using three-digit chopping...Ch. 1.2 - Prob. 10ESCh. 1.2 - Prob. 11ESCh. 1.2 - Prob. 12ESCh. 1.2 - Let f(x)=xcosxsinxxsinx. a. Find limx0 f(x). b....Ch. 1.2 - Let f(x)=exexx. a. Find limx0(ex ex )/x. b. Use...Ch. 1.2 - Use four-digit rounding arithmetic and the...Ch. 1.2 - Prob. 16ESCh. 1.2 - Prob. 17ESCh. 1.2 - Repeat Exercise 16 using four-digit chopping...Ch. 1.2 - Use the 64-bit-long real format to find the...Ch. 1.2 - Prob. 23ESCh. 1.2 - Discuss the difference between the arithmetic...Ch. 1.2 - Prob. 2DQCh. 1.2 - Discuss the various different ways to round...Ch. 1.2 - Discuss the difference between a number written in...Ch. 1.3 - The Maclaurin series for the arctangent function...Ch. 1.3 - Prob. 4ESCh. 1.3 - Prob. 5ESCh. 1.3 - Find the rates of convergence of the following...Ch. 1.3 - Find the rates of convergence of the following...Ch. 1.3 - Prob. 8ESCh. 1.3 - Prob. 9ESCh. 1.3 - Suppose that as x approaches zero,...Ch. 1.3 - Prob. 11ESCh. 1.3 - Prob. 12ESCh. 1.3 - Prob. 13ESCh. 1.3 - Prob. 14ESCh. 1.3 - a. How many multiplications and additions are...Ch. 1.3 - Write an algorithm to sum the finite series i=1nxi...Ch. 1.3 - Construct an algorithm that has as input an...Ch. 1.3 - Let P(x) = anxn + an1xn1 + + a1x + a0 be a...Ch. 1.3 - Prob. 4DQCh. 1.3 - Prob. 5DQCh. 1.3 - Prob. 6DQ
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, subject and related others by exploring similar questions and additional content below.Similar questions
- 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?arrow_forwardQuestion 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.)arrow_forwardQuestion 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_forward
- Question 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_forwardSeveral 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_forward
- We 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_forwardIn this problem, we consider a 2-period stock market model with evolution given in Fig. 1 below. Each period corresponds to one year (At = 1). The yearly interest rate is r = 1/3 = 33%. This model is a CRR model. 25 15 9 10 6 4 time Figure 1: Stock evolution for Problem 1. (a) Find the values of up and down factors u and d, and the risk-neutral probability q. (b) We consider a European put with strike price K the price of this option at time 0. == 16 and expiration T = 2 years. Find (c) Provide the number of shares of stock that the replicating portfolio contains at each pos- sible position. (d) You find this option available on the market for $2. What do you do? (Short answer.) (e) We consider an American put with strike price K = 16 and expiration T = 2 years. Find the price of this option at time 0 and describe the optimal exercising strategy. (f) We consider an American call with strike price K ○ = 16 and expiration T = 2 years. Find the price of this option at time 0 and describe…arrow_forward
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