Mathematical Ideas (13th Edition) - Standalone book
13th Edition
ISBN: 9780321977076
Author: Charles D. Miller, Vern E. Heeren, John Hornsby, Christopher Heeren
Publisher: PEARSON
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Chapter 2.1, Problem 16E
List all the elements of each set. Use set notation and the listing method to describe the set.
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4. Assume that a risk-free money market account is added to the market described in Q3.
The continuously compounded rate of return on the money market account is log (1.1).
(i) For each given μ, use Lagrange multipliers to determine the proportions (as a
function of μ) of wealth invested in the three assets available for the minimum
variance portfolio with expected return μ.
(ii) Determine the market portfolio in this market and calculate its Sharp ratio.
3. A market consists of two risky assets with rates of return R₁ and R2 and no risk-free
asset. From market data the following have been estimated: ER₁ = 0.25, ER2 = 0.05,
Var R₁ = 0.01, Var R2 = 0.04 and the correlation between R1 and R2 is p = -0.75.
(i) Given that an investor is targeting a total expected return of μ = 0.2. What
portfolio weights should they choose to meet this goal with minimum portfolio
variance? Correct all your calculations up to 4 decimal points.
(ii) Determine the global minimum-variance portfolio and the expected return and
variance of return of this portfolio (4 d.p.).
(iii) Sketch the minimum-variance frontier in the μ-σ² plane and indicate the efficient
frontier.
(iv) Without further calculation, explain how the minimum variance of the investor's
portfolio return will change if the two risky assets were independent.
2. A landlord is about to write a rental contract for a tenant which lasts T months. The
landlord first decides the length T > 0 (need not be an integer) of the contract, the
tenant then signs it and pays an initial handling fee of £100 before moving in. The
landlord collects the total amount of rent erT at the end of the contract at a continuously
compounded rate r> 0, but the contract stipulates that the tenant may leave before T,
in which case the landlord only collects the total rent up until the tenant's departure
time 7. Assume that 7 is exponentially distributed with rate > 0, λ‡r.
(i) Calculate the expected total payment EW the landlord will receive in terms of T.
(ii) Assume that the landlord has logarithmic utility U(w) = log(w - 100) and decides
that the rental rate r should depend on the contract length T by
r(T)
=
λ
√T
1
For each given λ, what T (as a function of X) should the landlord choose so as to
maximise their expected utility? Justify your answer.
Hint. It might be…
Chapter 2 Solutions
Mathematical Ideas (13th Edition) - Standalone book
Ch. 2.1 - Prob. 1ECh. 2.1 - Match each set in Group I with the appropriate...Ch. 2.1 - Match each set in Group I with the appropriate...Ch. 2.1 - Match each set in Group I with the appropriate...Ch. 2.1 - Match each set in Group I with the appropriate...Ch. 2.1 - Match each set in Group I with the appropriate...Ch. 2.1 - Match each set in Group I with the appropriate...Ch. 2.1 - Match each set in Group I with the appropriate...Ch. 2.1 - Prob. 9ECh. 2.1 - Prob. 10E
Ch. 2.1 - Prob. 11ECh. 2.1 - Prob. 12ECh. 2.1 - Prob. 13ECh. 2.1 - List all the elements of each set. Use set...Ch. 2.1 - List all the elements of each set. Use set...Ch. 2.1 - List all the elements of each set. Use set...Ch. 2.1 - Prob. 17ECh. 2.1 - Prob. 18ECh. 2.1 - Denote each set by the listing method. There may...Ch. 2.1 - Denote each set by the listing method. There may...Ch. 2.1 - Prob. 21ECh. 2.1 - Prob. 22ECh. 2.1 - Prob. 23ECh. 2.1 - Denote each set by the listing method. There may...Ch. 2.1 - Prob. 25ECh. 2.1 - 26 {(x, y) |x and y are integers, and
Ch. 2.1 - Denote each set by set-builder notation using x as...Ch. 2.1 - Denote each set by set-builder notation, using x...Ch. 2.1 - 29.
Ch. 2.1 - Denote each set by set-builder notation, using x...Ch. 2.1 - Prob. 31ECh. 2.1 - Prob. 32ECh. 2.1 - Prob. 33ECh. 2.1 - Prob. 34ECh. 2.1 - Identify each set as finite or infinite.
35.
Ch. 2.1 - Identify each set as finite or infinite. {6,12,18}Ch. 2.1 - Identify each set as finite or infinite. {...Ch. 2.1 - Identify each set as finite or infinite. 3,6,9,Ch. 2.1 - Prob. 39ECh. 2.1 - Identify each set as finite or infinite.
40 {x|x...Ch. 2.1 - Identify each set as finite or infinite. {x|x is a...Ch. 2.1 - Identify each set as finite or infinite. {x|x is a...Ch. 2.1 - Find n (A) for each set. A=0,1,2,3,4,5,6,7Ch. 2.1 - Find n (A) for each set. A=3,1,1,3,5,7,9Ch. 2.1 - Find n (A) for each set.
45.
Ch. 2.1 - Find n (A) for each set. A=0,1,2,3,,2000Ch. 2.1 - Prob. 47ECh. 2.1 - Prob. 48ECh. 2.1 - Prob. 49ECh. 2.1 - Prob. 50ECh. 2.1 - Find n (A) for each set. A={...Ch. 2.1 - Prob. 52ECh. 2.1 - Although x is a consonant why can we write x is a...Ch. 2.1 - Prob. 54ECh. 2.1 - Prob. 55ECh. 2.1 - Identify each set as well defined or not well...Ch. 2.1 - Prob. 57ECh. 2.1 - Prob. 58ECh. 2.1 - Fill each blank with either or to make each...Ch. 2.1 - Prob. 60ECh. 2.1 - Prob. 61ECh. 2.1 - Prob. 62ECh. 2.1 - Prob. 63ECh. 2.1 - Prob. 64ECh. 2.1 - Fill each blank with either or to make each...Ch. 2.1 - The statement 96,86,76 is true even though the...Ch. 2.1 - Write true or false for each statement. 32,5,6,8Ch. 2.1 - Write true or false for each statement. m1,m,n,o,pCh. 2.1 - Prob. 69ECh. 2.1 - Write true or false for each statement. 2-2,5,8,9Ch. 2.1 - Write true or false for each statement....Ch. 2.1 - Prob. 72ECh. 2.1 - Write true or false for each statement....Ch. 2.1 - Prob. 74ECh. 2.1 - Prob. 75ECh. 2.1 - Prob. 76ECh. 2.1 - Prob. 77ECh. 2.1 - Prob. 78ECh. 2.1 - Prob. 79ECh. 2.1 - Prob. 80ECh. 2.1 - Write true or false for each statement in...Ch. 2.1 - Prob. 82ECh. 2.1 - Prob. 83ECh. 2.1 - Prob. 84ECh. 2.1 - 85. The human mind likes to create collections....Ch. 2.1 - Prob. 86ECh. 2.1 - Prob. 87ECh. 2.1 - Prob. 88ECh. 2.1 - Prob. 89ECh. 2.1 - Prob. 90ECh. 2.1 - Prob. 91ECh. 2.1 - Prob. 92ECh. 2.2 - Prob. 1ECh. 2.2 - Prob. 2ECh. 2.2 - Prob. 3ECh. 2.2 - Prob. 4ECh. 2.2 - Prob. 5ECh. 2.2 - Insert or in each blank to obtain a true...Ch. 2.2 - Insert or in each blank to obtain a true...Ch. 2.2 - Insert or in each blank to obtain a true...Ch. 2.2 - Insert or in each blank to obtain a true...Ch. 2.2 - Insert or in each blank to obtain a true...Ch. 2.2 - Insert or in each blank to obtain a true...Ch. 2.2 - Insert or in each blank to obtain a true...Ch. 2.2 - Prob. 13ECh. 2.2 - {red, blue, yellow}_____{yellow, blue, red}Ch. 2.2 - Prob. 15ECh. 2.2 - Prob. 16ECh. 2.2 - 17. _____{0}
Ch. 2.2 - _____Ch. 2.2 - {0, 1, 2, 3}______{1, 2, 3, 4}Ch. 2.2 - 20.{ 56,98 }{ 65,89 }Ch. 2.2 - Prob. 21ECh. 2.2 - Prob. 22ECh. 2.2 - Prob. 23ECh. 2.2 - Prob. 24ECh. 2.2 - Prob. 25ECh. 2.2 - Prob. 26ECh. 2.2 - Prob. 27ECh. 2.2 - Prob. 28ECh. 2.2 - Prob. 29ECh. 2.2 - Prob. 30ECh. 2.2 - Prob. 31ECh. 2.2 - Prob. 32ECh. 2.2 - Prob. 33ECh. 2.2 - Prob. 34ECh. 2.2 - For Exercises 21-36, tell whether each statement...Ch. 2.2 - For Exercises 21-36, tell whether each statement...Ch. 2.2 - Prob. 37ECh. 2.2 - Prob. 38ECh. 2.2 - Prob. 39ECh. 2.2 - For Exercises 37-40, find (a) the number of...Ch. 2.2 - Prob. 41ECh. 2.2 - Prob. 42ECh. 2.2 - Prob. 43ECh. 2.2 - Prob. 44ECh. 2.2 - Fly to California Drive to Califorina Higher cost...Ch. 2.2 - Prob. 46ECh. 2.2 - Prob. 47ECh. 2.2 - Prob. 48ECh. 2.2 - Prob. 49ECh. 2.2 - Prob. 50ECh. 2.2 - Prob. 51ECh. 2.2 - Prob. 52ECh. 2.2 - Prob. 53ECh. 2.2 - Prob. 54ECh. 2.2 - Prob. 55ECh. 2.2 - Prob. 56ECh. 2.2 - Prob. 57ECh. 2.2 - Prob. 58ECh. 2.2 - Prob. 59ECh. 2.2 - Prob. 60ECh. 2.2 - Prob. 61ECh. 2.2 - Prob. 62ECh. 2.2 - Prob. 63ECh. 2.2 - Prob. 64ECh. 2.3 - Match each term in Group I with the appropriate...Ch. 2.3 - Match each term in Group I with the appropriate...Ch. 2.3 - Match each term in Group I with the appropriate...Ch. 2.3 - Match each term in Group I with the appropriate...Ch. 2.3 - Match each term in Group I with the appropriate...Ch. 2.3 - Match each term in Group I with the appropriate...Ch. 2.3 - Perform the indicated operations, and designate...Ch. 2.3 - Perform the indicated operations, and designate...Ch. 2.3 - Perform the indicated operations, and designate...Ch. 2.3 - Perform the indicated operations, and designate...Ch. 2.3 - Perform the indicated operations, and designate...Ch. 2.3 - Perform the indicated operations, and designate...Ch. 2.3 - Perform the indicated operations, and designate...Ch. 2.3 - Perform the indicated operations, and designate...Ch. 2.3 - Prob. 15ECh. 2.3 - 16.
Ch. 2.3 - Prob. 17ECh. 2.3 - 18.
Ch. 2.3 - (ZX)YCh. 2.3 - (TX)ZCh. 2.3 - X(XY)Ch. 2.3 - Prob. 22ECh. 2.3 - 23
Ch. 2.3 - Prob. 24ECh. 2.3 - Prob. 25ECh. 2.3 - (AB)(BA)Ch. 2.3 - 27.
Ch. 2.3 - (AB)CCh. 2.3 - Prob. 29ECh. 2.3 - TACh. 2.3 - Prob. 31ECh. 2.3 - TACh. 2.3 - Prob. 33ECh. 2.3 - Prob. 34ECh. 2.3 - Prob. 35ECh. 2.3 - An accountant is sorting tax returns in her files...Ch. 2.3 - Prob. 37ECh. 2.3 - 38.
Ch. 2.3 - 39.
Ch. 2.3 - n(AB)=n(A)+n(B)(AB)Ch. 2.3 - For Exercises41-44 use your results in parts (a)...Ch. 2.3 - Prob. 42ECh. 2.3 - Prob. 43ECh. 2.3 - For Exercises 41-44 use your results in parts (a)...Ch. 2.3 - Prob. 45ECh. 2.3 - (2,13)=(13,2)Ch. 2.3 - 6,3=3,6Ch. 2.3 - 48.
Ch. 2.3 - Find and for A and B defined as follows.
49.
Ch. 2.3 - Prob. 50ECh. 2.3 - Use the given information to find n(AB) and n(BA)...Ch. 2.3 - n(A)=13 and n(B)=5Ch. 2.3 - Find the cardinal number specified. If n(AB)=72...Ch. 2.3 - Find the cardinal number specified. If n(AB)=300...Ch. 2.3 - Prob. 55ECh. 2.3 - Prob. 56ECh. 2.3 - Prob. 57ECh. 2.3 - Prob. 58ECh. 2.3 - Use a Venn diagram similar to the one shown below...Ch. 2.3 - Prob. 60ECh. 2.3 - Prob. 61ECh. 2.3 - Prob. 62ECh. 2.3 - Use a Venn diagram similar to the one shown below...Ch. 2.3 - Prob. 64ECh. 2.3 - Prob. 65ECh. 2.3 - Prob. 66ECh. 2.3 - Prob. 67ECh. 2.3 - Prob. 68ECh. 2.3 - Prob. 69ECh. 2.3 - Use a Venn diagram to shade each set (AC)BCh. 2.3 - Prob. 71ECh. 2.3 - Prob. 72ECh. 2.3 - Prob. 73ECh. 2.3 - Write a description of each shaded area Use the...Ch. 2.3 - Write a description of each shaded area Use the...Ch. 2.3 - Write a description of each shaded area Use the...Ch. 2.3 - Prob. 77ECh. 2.3 - Prob. 78ECh. 2.3 - Prob. 79ECh. 2.3 - Prob. 80ECh. 2.3 - Prob. 81ECh. 2.3 - Prob. 82ECh. 2.3 - Prob. 83ECh. 2.3 - Prob. 84ECh. 2.3 - Prob. 85ECh. 2.3 - Prob. 86ECh. 2.3 - Prob. 87ECh. 2.3 - Prob. 88ECh. 2.3 - Prob. 89ECh. 2.3 - Prob. 90ECh. 2.4 - Prob. 1ECh. 2.4 - 2.
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Ch. 2.4 - 3 a ABC b ABC c. ABC d ABC e ABC f ABC g ABC h ABCCh. 2.4 -
4.
a
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Ch. 2.4 - In Exercises 5-10, make use of an appropriate...Ch. 2.4 - Find the value of n(AB) if n(A)=16,n(B)=28, and...Ch. 2.4 - Find the value of n (AB) if n(A)=20,n(B)=12, and...Ch. 2.4 - In Exercises 5-10, make use of an appropriate...Ch. 2.4 - 9. Find the value of n (A) if and
Ch. 2.4 - Prob. 10ECh. 2.4 - Prob. 11ECh. 2.4 - Prob. 12ECh. 2.4 - n(A)=25,n(B)=28,n(AB)=40,n(AB)=10Ch. 2.4 - 14.
Ch. 2.4 - Prob. 15ECh. 2.4 - ...Ch. 2.4 - 17
Ch. 2.4 - 18
Ch. 2.4 - Use Venn diagrams to work each problem.
19....Ch. 2.4 - Compact Disc Collection Gitti is a fan of the...Ch. 2.4 - Student Response to Classical Composers The 65...Ch. 2.4 - Financial Aid for Students At a southern...Ch. 2.4 - 23 Animated Movies A middle school counselor...Ch. 2.4 - 24 Non-Mainline Religious Beliefs 140 U S adults...Ch. 2.4 - Survey on Attitudes toward Religion Researchers...Ch. 2.4 - Prob. 26ECh. 2.4 - Hospital Patient Symptoms A survey was conducted...Ch. 2.4 - Song Themes It was once said that country-western...Ch. 2.4 - Prob. 29ECh. 2.4 - Sports Viewing A survey of 130 TV viewers was...Ch. 2.4 - Prob. 31ECh. 2.4 - Army Housing A study of U S. Army housing trends...Ch. 2.4 - Prob. 33ECh. 2.4 - Prob. 34ECh. 2 - Prob. 1TCh. 2 - Prob. 2TCh. 2 - Prob. 3TCh. 2 - Prob. 4TCh. 2 - In Exercises 1-14 let
Identify each statement as...Ch. 2 - Prob. 6TCh. 2 - Prob. 7TCh. 2 - In Exercises 1-14 let...Ch. 2 - n[(AB)C]=4Ch. 2 - In Exercises 1-14 let
Identify each statement as...Ch. 2 - Prob. 11TCh. 2 - In Exercises 1-14 let...Ch. 2 - Prob. 13TCh. 2 - Prob. 14TCh. 2 - Give a word description for each set. {-3, -1, 1,...Ch. 2 - Give a word description for each set.
16. {Sun,...Ch. 2 - Express each set in set-builder notation.
17. {-1,...Ch. 2 - Express each set in set-builder notation.
18. {24,...Ch. 2 - Place both, or neither in each blank to make a...Ch. 2 - Place both, or neither in each blank to make a...Ch. 2 - Prob. 21TCh. 2 - Prob. 22TCh. 2 - Prob. 23TCh. 2 - Prob. 24TCh. 2 - 25 State De Morgan's laws for sets in words rather...Ch. 2 - Facts about Inventions The table lists ten...Ch. 2 - Prob. 27TCh. 2 - Prob. 28TCh. 2 - Prob. 29TCh. 2 - Financial Aid to College Students Three sources of...
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- Please solving problem2 Problem1 We consider a two-period binomial model with the following properties: each period lastsone (1) year and the current stock price is S0 = 4. On each period, the stock price doubleswhen it moves up and is reduced by half when it moves down. The annual interest rateon the money market is 25%. (This model is the same as in Prob. 1 of HW#2).We consider four options on this market: A European call option with maturity T = 2 years and strike price K = 5; A European put option with maturity T = 2 years and strike price K = 5; An American call option with maturity T = 2 years and strike price K = 5; An American put option with maturity T = 2 years and strike price K = 5.(a) Find the price at time 0 of both European options.(b) Find the price at time 0 of both American options. Compare your results with (a)and comment.(c) For each of the American options, describe the optimal exercising strategy.arrow_forwardPlease ensure that all parts of the question are answered thoroughly and clearly. Include a diagram to help explain answers. Make sure the explanation is easy to follow. Would appreciate work done written on paper. Thank you.arrow_forwardThis question builds on an earlier problem. The randomized numbers may have changed, but have your work for the previous problem available to help with this one. A 4-centimeter rod is attached at one end to a point A rotating counterclockwise on a wheel of radius 2 cm. The other end B is free to move back and forth along a horizontal bar that goes through the center of the wheel. At time t=0 the rod is situated as in the diagram at the left below. The wheel rotates counterclockwise at 1.5 rev/sec. At some point, the rod will be tangent to the circle as shown in the third picture. A B A B at some instant, the piston will be tangent to the circle (a) Express the x and y coordinates of point A as functions of t: x= 2 cos(3πt) and y= 2 sin(3t) (b) Write a formula for the slope of the tangent line to the circle at the point A at time t seconds: -cot(3πt) sin(3лt) (c) Express the x-coordinate of the right end of the rod at point B as a function of t: 2 cos(3πt) +411- 4 -2 sin (3лt) (d)…arrow_forward
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