RESEARCH METHODS FOR BEHAVIORAL...
6th Edition
ISBN: 2819280099110
Author: GRAVETTER
Publisher: CENGAGE L
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Chapter 14, Problem 1E
To determine
To define the words: statistical significance, statistically significant result and practical significance, or clinical significance.
Expert Solution & Answer
Answer to Problem 1E
Solution:
The statistical significance means difference between the observed and calculated value which occurs due to chance.
The statistical significance results means to reject the null hypothesis.
The practical or clinical significance tells about the importance of the difference between the observed and calculated value which occurs due to chance.
Explanation of Solution
The word 'statistical significance' is of great importance in statistical analysis. It tells that the results obtained from analysis are meaningful or not. It is determined by the p-value which is the observed level of significance. By the p-value, one can decide whether to reject or do not reject the null hypothesis.
The term 'statistically significant result' tells to reject the null hypothesis as p-value is less than the decided level of significance, that is, the error rate you are willing to accept. If the result shows the statistical significance, it means that you have to reject the null hypothesis.
The clinical significance or practical significance is the ability for a research experiment to help a patient so much that they are return to normal
The term statistical significance tells that there is a difference between observed and calculated value which occurs due to chance but clinical significance tells about the importance of this difference.
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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.)
Chapter 14 Solutions
RESEARCH METHODS FOR BEHAVIORAL...
Ch. 14.1 - Describe the goal of single-case research and...Ch. 14.1 - Identify the basic elements of a single-case...Ch. 14.2 - Describe the purpose of a phase in a single-case...Ch. 14.2 - Prob. 4LOCh. 14.3 - Describe the structure of an ABAB reversal design...Ch. 14.3 - Identify the strengths and weaknesses of an ABAB...Ch. 14.3 - Explain the circumstances in which an ABAB...Ch. 14.4 - Describe the structure of a multiple-baseline...Ch. 14.4 - Identity and describe the component-analysis...Ch. 14.4 - Identify the strengths and weaknesses of a...
Ch. 14.5 - Identify the general advantages and disadvantages...Ch. 14 - Prob. 1ECh. 14 - Prob. 2ECh. 14 - Traditional statistics (means, variances, and...Ch. 14 - Prob. 4ECh. 14 - Prob. 5ECh. 14 - Prob. 6ECh. 14 - What pattern of results is needed to provide...Ch. 14 - Identify the four phases that make up an ABAB...Ch. 14 - In general, how does a phase-change design like...Ch. 14 - Explain why an ABAB reversal design is...Ch. 14 - Prob. 11ECh. 14 - Prob. 12ECh. 14 - Prob. 13ECh. 14 - How does a multiple-baseline design rule out...Ch. 14 - Suppose (hat a complex therapy procedure contains...Ch. 14 - Prob. 16ECh. 14 - Briefly explain why a clinical psychologist might...
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