Introduction To Statistics And Data Analysis
6th Edition
ISBN: 9781337793612
Author: PECK, Roxy.
Publisher: Cengage Learning,
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Chapter 3.1, Problem 1E
Each person in a nationally representative sample of 1252 young adults age 23 to 28 years old was asked how they viewed their financial physique (financial health) (“2009 Young Adults & Money Survey Findings,” Charles Schwab, 2009). “Toned and fit” was chosen by 18% of the respondents, while 55% responded “a little bit flabby,” and 27% responded “seriously out of shape.” Summarize this information in a pie chart. (Hint: See Examples 3.2 and 3.3.)
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In this problem, we consider a Brownian motion (W+) t≥0. We consider a stock model (St)t>0
given (under the measure P) by
d.St 0.03 St dt + 0.2 St dwt,
with So 2. We assume that the interest rate is r = 0.06. The purpose of this problem is to
price an option on this stock (which we name cubic put). This option is European-type, with
maturity 3 months (i.e. T = 0.25 years), and payoff given by
F = (8-5)+
(a) Write the Stochastic Differential Equation satisfied by (St) under the risk-neutral measure
Q. (You don't need to prove it, simply give the answer.)
(b) Give the price of a regular European put on (St) with maturity 3 months and strike K = 2.
(c) Let X =
S. Find the Stochastic Differential Equation satisfied by the process (Xt)
under the measure Q.
(d) Find an explicit expression for X₁ = S3 under measure Q.
(e) Using the results above, find the price of the cubic put option mentioned above.
(f) Is the price in (e) the same as in question (b)? (Explain why.)
Chapter 3 Solutions
Introduction To Statistics And Data Analysis
Ch. 3.1 - Each person in a nationally representative sample...Ch. 3.1 - The graphical display on the next page is similar...Ch. 3.1 - The survey referenced in the previous exercise was...Ch. 3.1 - The National Confectioners Association asked 1006...Ch. 3.1 - College student attitudes about e-books were...Ch. 3.1 - The Center for Science in the Public Interest...Ch. 3.1 - Using the data given in the previous exercise,...Ch. 3.1 - The article Housework around the World (USA TODAY,...Ch. 3.1 - The authors of the report Findings from the 2009...Ch. 3.1 - The survey on student attitude toward e-books...
Ch. 3.1 - During 2017, Gallup conducted a survey of adult...Ch. 3.1 - An article about college loans (New Rules Would...Ch. 3.1 - The report Findings From the 2014 College Senior...Ch. 3.2 - The National Center for Health Statistics provided...Ch. 3.2 - The paper State-Level Cancer Mortality...Ch. 3.2 - The accompanying data on seat belt use for each of...Ch. 3.2 - The previous exercise gave data on seat belt use...Ch. 3.2 - The U.S. Department of Health and Human Services...Ch. 3.2 - The article Economy Low, Generosity High (USA...Ch. 3.2 - The U.S. gasoline tax per gallon data for each of...Ch. 3.2 - A report from Texas Transportation Institute...Ch. 3.2 - The percentage of teens not in school or working...Ch. 3.3 - The data in the accompanying table are from the...Ch. 3.3 - The accompanying data on annual maximum wind speed...Ch. 3.3 - The accompanying relative frequency table is based...Ch. 3.3 - The data in the accompanying table represents the...Ch. 3.3 - Construct a histogram for the data in the previous...Ch. 3.3 - The following two relative frequency distributions...Ch. 3.3 - U.S. Census data for San Luis Obispo County,...Ch. 3.3 - Use the commute time data given in the previous...Ch. 3.3 - The report Trends in College Pricing 2012...Ch. 3.3 - An exam is given to students in an introductory...Ch. 3.3 - The accompanying frequency distribution summarizes...Ch. 3.3 - Example 3.19 used annual rainfall data for...Ch. 3.3 - Use the relative frequency distribution...Ch. 3.3 - Prob. 37ECh. 3.3 - Use the cumulative relative frequencies given in...Ch. 3.3 - Using the five class intervals 100 to 120, 120 to...Ch. 3.4 - The accompanying table gives data from a survey of...Ch. 3.4 - Consumer Reports Health (consumerreports.org) gave...Ch. 3.4 - Consumer Reports rated 29 fitness trackers (such...Ch. 3.4 - Consumer Reports (consumerreports.org) rated 37...Ch. 3.4 - The Solid Waste Management section of the...Ch. 3.4 - The report Daily Cigarette Use: Indicators on...Ch. 3.4 - The accompanying time series plot of movie box...Ch. 3.5 - The accompanying comparative bar chart is similar...Ch. 3.5 - The figure at the top left of the next page is...Ch. 3.5 - The figure at the top right of the next page is...Ch. 3.5 - The two graphical displays below are similar to...Ch. 3.5 - The following graphical display is similar to one...Ch. 3.5 - Explain why the following graphical display...Ch. 3 - Each year, The Princeton Review conducts surveys...Ch. 3 - Prob. 55CRCh. 3 - Prob. 56CRCh. 3 - Prob. 57CRCh. 3 - Prob. 58CRCh. 3 - Does the size of a transplanted organ matter? A...Ch. 3 - Prob. 60CRCh. 3 - The article Tobacco and Alcohol Use in G-Rated...Ch. 3 - Prob. 62CRCh. 3 - Prob. 63CRCh. 3 - Many nutritional experts have expressed concern...Ch. 3 - Americium 241 (241Am) is a radioactive material...Ch. 3 - Does eating broccoli reduce the risk of prostate...Ch. 3 - An article that appeared in USA TODAY (August 11,...Ch. 3 - Sometimes samples are composed entirely of...Ch. 3 - Prob. 4CRECh. 3 - More than half of Californias doctors say they are...Ch. 3 - Based on observing more than 400 drivers in the...Ch. 3 - An article from the Associated Press (May 14,...Ch. 3 - Prob. 8CRECh. 3 - Prob. 9CRECh. 3 - Prob. 10CRECh. 3 - The article Determination of Most Representative...Ch. 3 - The paper Lessons from Pacemaker Implantations...Ch. 3 - How does the speed of a runner vary over the...Ch. 3 - Prob. 14CRECh. 3 - One factor in the development of tennis elbow, a...Ch. 3 - An article that appeared in USA TODAY (September...
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