Intro Stats
4th Edition
ISBN: 9780321826275
Author: Richard D. De Veaux
Publisher: PEARSON
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Chapter 23, Problem 15E
To determine
Explain 95% indicates for the given interval.
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In 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.
==
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(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
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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…
2.2, 13.2-13.3)
question: 5 point(s) possible
ubmit test
The accompanying table contains the data for the amounts (in oz) in cans of a certain soda. The cans are labeled to indicate that the contents are 20 oz of soda. Use the sign test and
0.05 significance level to test the claim that cans of this soda are filled so that the median amount is 20 oz. If the median is not 20 oz, are consumers being cheated?
Click the icon to view the data.
What are the null and alternative hypotheses?
OA. Ho: Medi
More Info
H₁: Medi
OC. Ho: Medi
H₁: Medi
Volume (in ounces)
20.3
20.1
20.4
Find the test stat
20.1
20.5
20.1
20.1
19.9
20.1
Test statistic =
20.2
20.3
20.3
20.1
20.4
20.5
Find the P-value
19.7
20.2
20.4
20.1
20.2
20.2
P-value=
(R
19.9
20.1
20.5
20.4
20.1
20.4
Determine the p
20.1
20.3
20.4
20.2
20.3
20.4
Since the P-valu
19.9
20.2
19.9
Print
Done
20 oz
20 oz
20 oz
20 oz
ce that the consumers are being cheated.
T
Teenage obesity (O), and weekly fast-food meals (F), among some selected Mississippi teenagers are:
Name Obesity (lbs) # of Fast-foods per week
Josh
185
10
Karl
172
8
Terry
168
9
Kamie
Andy
204
154
12
6
(a) Compute the variance of Obesity, s²o, and the variance of fast-food meals, s², of this data. [Must show full work].
(b) Compute the Correlation Coefficient between O and F. [Must show full work].
(c) Find the Coefficient of Determination between O and F. [Must show full work].
(d) Obtain the Regression equation of this data. [Must show full work].
(e) Interpret your answers in (b), (c), and (d). (Full explanations required).
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Chapter 23 Solutions
Intro Stats
Ch. 23.4 - Researchers in Food Science studied how big...Ch. 23.4 - Prob. 2JCCh. 23.4 - Prob. 3JCCh. 23 - Prob. 1ECh. 23 - Prob. 2ECh. 23 - Prob. 3ECh. 23 - Prob. 4ECh. 23 - Prob. 5ECh. 23 - Prob. 6ECh. 23 - Prob. 7E
Ch. 23 - Prob. 8ECh. 23 - Prob. 9ECh. 23 - Prob. 10ECh. 23 - Prob. 11ECh. 23 - 12. Shoot to score, double overtime One of the...Ch. 23 - Prob. 13ECh. 23 - Prob. 14ECh. 23 - Prob. 15ECh. 23 - Prob. 16ECh. 23 - Prob. 17ECh. 23 - Prob. 18ECh. 23 - Prob. 19ECh. 23 - Prob. 20ECh. 23 - Prob. 21ECh. 23 - Prob. 22ECh. 23 - Prob. 23ECh. 23 - Prob. 24ECh. 23 - Prob. 25ECh. 23 - Prob. 26ECh. 23 - Prob. 27ECh. 23 - Prob. 28ECh. 23 - Prob. 29ECh. 23 - Prob. 30ECh. 23 - Prob. 31ECh. 23 - Prob. 32ECh. 23 - Prob. 33ECh. 23 - Prob. 34ECh. 23 - Fuel economy A consumer organization has reported...Ch. 23 - 36. SAT scores How strong was the association...Ch. 23 - Prob. 37ECh. 23 - 38. SATs, part II Consider the high school SAT...Ch. 23 - 39. Fuel economy, part III Consider again the data...Ch. 23 - 40. SATs, again Consider the high school SAT...Ch. 23 - Cereals A healthy cereal should be low in both...Ch. 23 - Brain size Does your IQ depend on the size of your...Ch. 23 - Prob. 43ECh. 23 - Prob. 44ECh. 23 - Prob. 45ECh. 23 - Prob. 46ECh. 23 - Ozone and population The Environmental Protection...Ch. 23 - Prob. 48ECh. 23 - Prob. 49ECh. 23 - 50. More sales and profits Consider again the...Ch. 23 - Prob. 51ECh. 23 - Crawling Researchers at the University of Denver...Ch. 23 - 53. Body fat Do the data shown in the table below...Ch. 23 - Prob. 54ECh. 23 - Midterms The data set below shows midterm and...Ch. 23 - Prob. 56ECh. 23 - Prob. 57ECh. 23 - All the efficiency money can buy 2011 A sample of...Ch. 23 - Education and mortality The following software...Ch. 23 - Property assessments The following software output...Ch. 23 - Prob. 61ECh. 23 - Prob. 62E
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- The average miles per gallon for a sample of 40 cars of model SX last year was 32.1, with a population standard deviation of 3.8. A sample of 40 cars from this year’s model SX has an average of 35.2 mpg, with a population standard deviation of 5.4. Find a 99 percent confidence interval for the difference in average mpg for this car brand (this year’s model minus last year’s).Find a 99 percent confidence interval for the difference in average mpg for last year’s model minus this year’s. What does the negative difference mean?arrow_forwardA special interest group reports a tiny margin of error (plus or minus 0.04 percent) for its online survey based on 50,000 responses. Is the margin of error legitimate? (Assume that the group’s math is correct.)arrow_forwardSuppose that 73 percent of a sample of 1,000 U.S. college students drive a used car as opposed to a new car or no car at all. Find an 80 percent confidence interval for the percentage of all U.S. college students who drive a used car.What sample size would cut this margin of error in half?arrow_forward
- You want to compare the average number of tines on the antlers of male deer in two nearby metro parks. A sample of 30 deer from the first park shows an average of 5 tines with a population standard deviation of 3. A sample of 35 deer from the second park shows an average of 6 tines with a population standard deviation of 3.2. Find a 95 percent confidence interval for the difference in average number of tines for all male deer in the two metro parks (second park minus first park).Do the parks’ deer populations differ in average size of deer antlers?arrow_forwardSuppose that you want to increase the confidence level of a particular confidence interval from 80 percent to 95 percent without changing the width of the confidence interval. Can you do it?arrow_forwardA random sample of 1,117 U.S. college students finds that 729 go home at least once each term. Find a 98 percent confidence interval for the proportion of all U.S. college students who go home at least once each term.arrow_forward
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