A Transition to Advanced Mathematics
8th Edition
ISBN: 9781285463261
Author: Douglas Smith, Maurice Eggen, Richard St. Andre
Publisher: Cengage Learning
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Chapter 1.8, Problem 16E
(a)
To determine
To find:
(b)
To determine
To find:
(c)
To determine
To find:
(d)
To determine
To find:
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b) Solve the following linear program using the 2-phase simplex algorithm. You should give
the initial tableau, and each further tableau produced during the execution of the
algorithm. If the program has an optimal solution, give this solution and state its
objective value. If it does not have an optimal solution, say why.
maximize ₁ - 2x2+x34x4
subject to 2x1+x22x3x41,
5x1 + x2-x3-×4 ≤ −1,
2x1+x2-x3-34
2,
1, 2, 3, 40.
9. An elementary single period market model contains a risk-free asset with interest rate
r = 5% and a risky asset S which has price 30 at time t = 0 and will have either price
10 or 60 at time t = 1. Find a replicating strategy for a contingent claim with payoff
h(S₁) = max(20 - S₁, 0) + max(S₁ — 50, 0).
Total [8 Marks]
8. An elementary single period market model has a risky asset with price So = 20 at the
beginning and a money market account with interest rate r = 0.04 compounded only
once at the end of the investment period.
=
=
In market model A, S₁ 10 with 15% probability and S₁
21 with 85% probability.
In market model B, S₁ = 25 with 10% probability and S₁ = 30 with 90% probability.
For each market model A, B, determine if the model is arbitrage-free. If not, construct
an arbitrage.
Total [9 Marks]
Chapter 1 Solutions
A Transition to Advanced Mathematics
Ch. 1.1 - Which of the following are propositions? Give the...Ch. 1.1 - For each pair of statements, determine whether the...Ch. 1.1 - Make a truth table for each of the following...Ch. 1.1 - If P, Q, and R are true while S and K are false,...Ch. 1.1 - Use truth tables to verify each part of Theorem...Ch. 1.1 - Which of the following pairs of propositional...Ch. 1.1 - Determine the propositional form and truth value...Ch. 1.1 - Suppose P, Q, and R are propositional forms....Ch. 1.1 - Suppose P, Q, S, and R are propositional forms, P...Ch. 1.1 - Use a truth table to determine whether each of the...
Ch. 1.1 - Give a useful denial of each statement. Assume...Ch. 1.1 - Restore parentheses to these abbreviated...Ch. 1.1 - Other logical connectives between two propositions...Ch. 1.1 - Other logical connectives between two propositions...Ch. 1.2 - Identify the antecedent and the consequent for...Ch. 1.2 - Prob. 2ECh. 1.2 - What can be said about the truth value of Q when...Ch. 1.2 - Identify the antecedent and the consequent for...Ch. 1.2 - Which of the following conditional sentences are...Ch. 1.2 - Which of the following are true? Assume that x and...Ch. 1.2 - Make truth tables for these propositional forms....Ch. 1.2 - Prove Theorem 1.2.2 by constructing truth tables...Ch. 1.2 - Determine whether each statement qualifies as a...Ch. 1.2 - Prob. 10ECh. 1.2 - Dictionaries indicate that the conditional meaning...Ch. 1.2 - Show that the following pairs of statements are...Ch. 1.2 - Prob. 13ECh. 1.2 - Give, if possible, an example of a false...Ch. 1.2 - Give the converse and contrapositive of each...Ch. 1.2 - Prob. 16ECh. 1.2 - The inverse, or opposite, of the conditional...Ch. 1.3 - Translate the following English sentences into...Ch. 1.3 - For each of the propositions in Exercise 1, write...Ch. 1.3 - Translate these definitions from the Appendix into...Ch. 1.3 - Prob. 4ECh. 1.3 - The sentence “People dislike taxes” might be...Ch. 1.3 - Let T={17},U={6},V={24} , and W={2,3,7,26} . In...Ch. 1.3 - (a) Complete the following proof of Theorem...Ch. 1.3 - Which of the following are true? The universe for...Ch. 1.3 - Give an English translation for each. The universe...Ch. 1.3 - Which of the following are true in the universe of...Ch. 1.3 - Let A(x) be an open sentence with variable x. (a)...Ch. 1.3 - Suppose the polynomials anxn+an1xn1+...+a0 and...Ch. 1.3 - Which of the following are denials of (!x)P(x) ?...Ch. 1.3 - Riddle: What is the English translation of the...Ch. 1.4 - Analyze the logical form of each of the following...Ch. 1.4 - A theorem of linear algebra states that if A andB...Ch. 1.4 - Verify that [(BM)L(ML)]B is a tautology. See the...Ch. 1.4 - These facts have been established at a crime...Ch. 1.4 - Prob. 5ECh. 1.4 - Let a and b be real numbers. Prove that (a)...Ch. 1.4 - Suppose a, b, c, and d are integers. Prove that...Ch. 1.4 - Give two proofs that if n is a natural number,...Ch. 1.4 - Let a, b, and c be integers and x, y, and z be...Ch. 1.4 - Recall that except for degenerate cases, the graph...Ch. 1.4 - Exercises throughout the text with this title ask...Ch. 1.5 - Analyze the logical form of each of the following...Ch. 1.5 - A theorem of linear algebra states that if A andB...Ch. 1.5 - Let x, y, and z be integers. Write a proof by...Ch. 1.5 - Write a proof by contraposition to show that for...Ch. 1.5 - A circle has center (2,4) . (a) Prove that (1,5)...Ch. 1.5 - Suppose a and b are positive integers. Write a...Ch. 1.5 - Prob. 7ECh. 1.5 - Prob. 8ECh. 1.5 - Prove by contradiction that if n is a natural...Ch. 1.5 - Prove that 5 is not a rational number.Ch. 1.5 - Three real numbers, x, y, and z, are chosen...Ch. 1.5 - Assign a grade of A (correct), C (partially...Ch. 1.6 - Prove that (a) there exist integers m and n such...Ch. 1.6 - Prove that for all integers a, b, and c, If...Ch. 1.6 - Prove that if every even natural number greater...Ch. 1.6 - Provide either a proof or a counterexample for...Ch. 1.6 - (a) Prove that the natural number x is prime if...Ch. 1.6 - Prove that (a) for every natural number n, 1n1 ....Ch. 1.6 - Starting at 9 a.m. on Monday, a hiker walked at a...Ch. 1.6 - Show by example that each of the following...Ch. 1.6 - Assign a grade of A (correct), C (partially...Ch. 1.7 - (a) Let a be a negative real number. Prove that if...Ch. 1.7 - Prob. 2ECh. 1.7 - Prove that (a) 5n2+3n+4 is even, for all integers...Ch. 1.7 - Prob. 4ECh. 1.7 - Prove that (a) if x + y is irrational, then either...Ch. 1.7 - Prob. 6ECh. 1.7 - Prob. 7ECh. 1.7 - Prob. 8ECh. 1.7 - Prob. 9ECh. 1.7 - Prob. 10ECh. 1.7 - Assign a grade of A (correct), C (partially...Ch. 1.8 - For each given pair a, b of integers, find the...Ch. 1.8 - Prob. 2ECh. 1.8 - Let a and b be integers, a0 , and ab . Prove that...Ch. 1.8 - Prob. 4ECh. 1.8 - Prob. 5ECh. 1.8 - Prob. 6ECh. 1.8 - Prob. 7ECh. 1.8 - Prob. 8ECh. 1.8 - Prove that for every prime p and for all natural...Ch. 1.8 - Let q be a natural number greater than 1 with the...Ch. 1.8 - Prob. 11ECh. 1.8 - Prob. 12ECh. 1.8 - Let a and b be nonzero integers that are...Ch. 1.8 - Let a and b be nonzero integers and d=gcd(a,b) ....Ch. 1.8 - Let a and b be nonzero integers and c be an...Ch. 1.8 - Prob. 16ECh. 1.8 - Prob. 17ECh. 1.8 - Let a and b be integers, and let m=lcm(a,b) . Use...Ch. 1.8 - The greatest common divisor of positive integers a...Ch. 1.8 - Prob. 20ECh. 1.8 - Prob. 21E
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- b) Solve the following linear program using the 2-phase simplex algorithm. You should give the initial tableau, and each further tableau produced during the execution of the algorithm. If the program has an optimal solution, give this solution and state its objective value. If it does not have an optimal solution, say why. maximize ₁ - 2x2+x34x4 subject to 2x1+x22x3x41, 5x1 + x2-x3-×4 ≤ −1, 2x1+x2-x3-34 2, 1, 2, 3, 40.arrow_forwardSuppose we have a linear program in standard equation form maximize cTx subject to Ax = b. x ≥ 0. and suppose u, v, and w are all optimal solutions to this linear program. (a) Prove that zu+v+w is an optimal solution. (b) If you try to adapt your proof from part (a) to prove that that u+v+w is an optimal solution, say exactly which part(s) of the proof go wrong. (c) If you try to adapt your proof from part (a) to prove that u+v-w is an optimal solution, say exactly which part(s) of the proof go wrong.arrow_forwarda) Suppose that we are carrying out the 1-phase simplex algorithm on a linear program in standard inequality form (with 3 variables and 4 constraints) and suppose that we have reached a point where we have obtained the following tableau. Apply one more pivot operation, indicating the highlighted row and column and the row operations you carry out. What can you conclude from your updated tableau? x1 x2 x3 81 82 83 84 81 -2 0 1 1 0 0 0 3 82 3 0 -2 0 1 2 0 6 12 1 1 -3 0 0 1 0 2 84 -3 0 2 0 0 -1 1 4 -2 -2 0 11 0 0-4 0 -8arrow_forward
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