Mathematics for Elementary Teachers with Activities, Loose-Leaf Version Plus MyLab Math -- Access Card Package (5th Edition)
5th Edition
ISBN: 9780134800196
Author: Sybilla Beckmann
Publisher: PEARSON
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Chapter 16.4, Problem 8P
There are 3 boxes, one of which contains 2 envelopes, and the other 2 boxes contain 3 envelopes each. In the box with the 2 envelopes, 1 of the 2 envelopes contains a prize. No other envelope contains a prize. If you pick a random box and a random envelope from that box, what is the probability that you will win the prize? Explain how to solve this problem with fraction multiplication, and explain why this method makes sense.
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Chapter 16 Solutions
Mathematics for Elementary Teachers with Activities, Loose-Leaf Version Plus MyLab Math -- Access Card Package (5th Edition)
Ch. 16.1 - Some games have spinners. When the arrow in a...Ch. 16.1 - a. Draw a spinner such that the probability of...Ch. 16.1 - a. Draw a 4-color spinner (red, green, yellow,...Ch. 16.1 - Write a paragraph discussing the following: a....Ch. 16.1 - A family math night at school features the...Ch. 16.1 - There are 50 small balls in a tub. Some balls are...Ch. 16.1 - In a classroom, there are l00 plastic fish in a...Ch. 16.1 - There is a bag filled with 4 red blocks and 16...Ch. 16.1 - Write several paragraphs in which you describe and...Ch. 16.2 - A bakery makes 4 different kinds of cake. Each...
Ch. 16.2 - Allie and Betty want to know how many 3-letter...Ch. 16.2 - Explain your answers to the following: a. How many...Ch. 16.2 - In all 3 parts in this problem, explain your...Ch. 16.2 - Most Georgia car license plates currently use the...Ch. 16.2 - a. A 40-member club will elect a president and...Ch. 16.2 - A dance club has 10 women and 10 men. In each of...Ch. 16.2 - A pizza parlor problem. How many different large...Ch. 16.2 - A pizza parlor offers lo different toppings to...Ch. 16.3 - A children’s game has a spinner that is equally...Ch. 16.3 - A children’s game has a spinner that is equally...Ch. 16.3 - A children’s game has a spinner that is equally...Ch. 16.3 - A children’s game has a spinner that is equally...Ch. 16.3 - A children’s game has a spinner that is equally...Ch. 16.3 - Determine the probability of spinning a blue...Ch. 16.3 - Determine the probability of spinning a blue...Ch. 16.3 - Determine the probability of spinning a red...Ch. 16.3 - Suppose you have a penny, a nickel, a dime, and a...Ch. 16.3 - You have a bag containing 2 yellow and 3 blue...Ch. 16.3 - There are 3 plastic bears in a bag. The teacher...Ch. 16.3 - There are 4 black marbles and 5 red marbles in a...Ch. 16.3 - Suppose you have 100 light bulbs and one of them...Ch. 16.3 - A game at a fund-raiser: There are 20 rubber ducks...Ch. 16.3 - You are making up a game for a fund-raiser. You...Ch. 16.3 - a. A waitress is serving 5 people at a table. She...Ch. 16.3 - Prob. 17PCh. 16.3 - Prob. 18PCh. 16.4 - A children’s game has a spinner that is equally...Ch. 16.4 - Suppose you flip a coin and roll a number cube...Ch. 16.4 - Use fraction arithmetic to solve problem 1 on page...Ch. 16.4 - Use fraction arithmetic to solve problem 3 on page...Ch. 16.4 - Use fraction arithmetic to solve problem 6 on page...Ch. 16.4 - Prob. 6PCh. 16.4 - Use fraction arithmetic to solve problem 8 on page...Ch. 16.4 - There are 3 boxes, one of which contains 2...Ch. 16.4 - A game consists of spinning a spinner and then...Ch. 16.4 - Prob. 10PCh. 16.4 - Prob. 11PCh. 16.4 - Prob. 12PCh. 16.4 - Prob. 13PCh. 16.4 - Prob. 14PCh. 16.4 - Suppose you have 2 boxes, 50 black pearls and 50...Ch. 16.4 - Due to its high population, China has a stringent...Ch. 16.4 - The Pretty Flower Company starts plants from seed...Ch. 16.4 - Suppose that ¡n a survey of a large, random group...Ch. 16.4 - Suppose that 1% of the population has a certain...
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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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