ALEKS 360 ELEM STATISTICS
10th Edition
ISBN: 9781264241385
Author: Bluman
Publisher: MCG
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Textbook Question
Chapter 2.1, Problem 11E
For Exercises 9–12, show frequency distributions that are incorrectly constructed. State the reasons why they are wrong.
| Class | Frequency |
| 162-164 | 3 |
| 165-167 | 7 |
| 168-170 | 18 |
| 174-176 | 0 |
| 177-179 | 5 |
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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 2 Solutions
ALEKS 360 ELEM STATISTICS
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Ch. 2.1 - For Exercises 912, show frequency distributions...Ch. 2.1 - For Exercises 912, show frequency distributions...Ch. 2.1 - For Exercises 912, show frequency distributions...Ch. 2.1 - Favorite Coffee Flavor A survey was taken asking...Ch. 2.1 - Trust in Internet Information A survey was taken...Ch. 2.1 - Eating at Fast Food Restaurants A survey was taken...Ch. 2.1 - Ages of Dogs The ages of 20 dogs in a pet shelter...Ch. 2.1 - Maximum Wind Speeds The data show the maximum wind...Ch. 2.1 - Stories in the Worlds Tallest Buildings The number...Ch. 2.1 - Ages of Declaration of Independence Signers The...Ch. 2.1 - Salaries of Governors Here are the salaries (in...Ch. 2.1 - Charity Donations A random sample of 30 large...Ch. 2.1 - Unclaimed Expired Prizes The number of unclaimed...Ch. 2.1 - Scores in the Rose Bowl The data show the scores...Ch. 2.1 - Consumption of Natural Gas Construct a frequency...Ch. 2.1 - Average Wind Speeds A sample of 40 large cities...Ch. 2.1 - Percentage of People Who Completed 4 or More Years...Ch. 2.1 - JFK Assassination A researcher conducted a survey...Ch. 2.1 - The Value of Pi The ratio of the circumference of...Ch. 2.2 - Selling Real Estate Assume you are a realtor in...Ch. 2.2 - Do Students Need Summer Development? 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