Discrete Mathematics with Graph Theory (Classic Version) (3rd Edition) (Pearson Modern Classics for Advanced Mathematics Series)
3rd Edition
ISBN: 9780134689555
Author: Edgar Goodaire, Michael Parmenter
Publisher: PEARSON
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Chapter 3.2, Problem 4E
Define
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For each month of the year, Taylor collected the average high temperatures in Jackson, Mississippi. He used the data to create the histogram shown. Which set of data did he use to create the histogram?
A
55, 60, 64, 72, 73, 75, 77, 81, 83, 91, 91, 92\ 55,\ 60,\ 64,\ 72,\ 73,\ 75,\ 77,\ 81,\ 83,\ 91,\ 91,\ 92 55, 60, 64, 72, 73, 75, 77, 81, 83, 91, 91, 92
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55, 57, 60, 65, 70, 71, 78, 79, 85, 86, 88, 91\ 55,\ 57,\ 60,\ 65,\ 70,\ 71,\ 78,\ 79,\ 85,\ 86,\ 88,\ 91 55, 57, 60, 65, 70, 71, 78, 79, 85, 86, 88, 91
C
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D
55, 58, 60, 66, 68, 75, 77, 82, 86, 89, 91, 91\ 55,\ 58,\ 60,\ 66,\ 68,\ 75,\ 77,\ 82,\ 86,\ 89,\ 91,\ 91 55, 58, 60, 66, 68, 75, 77, 82, 86, 89, 91, 91
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
Discrete Mathematics with Graph Theory (Classic Version) (3rd Edition) (Pearson Modern Classics for Advanced Mathematics Series)
Ch. 3.1 - True/False Questions A function from a set A to a...Ch. 3.1 - Prob. 2TFQCh. 3.1 - Prob. 3TFQCh. 3.1 - Prob. 4TFQCh. 3.1 - Prob. 5TFQCh. 3.1 - True/False Questions Define f:ZZ by f(x)=x+2. Then...Ch. 3.1 - Prob. 7TFQCh. 3.1 - Prob. 8TFQCh. 3.1 - Prob. 9TFQCh. 3.1 - Prob. 10TFQ
Ch. 3.1 - Prob. 11TFQCh. 3.1 - Prob. 12TFQCh. 3.1 - Determine whether each of the following relation...Ch. 3.1 - 2. Suppose A is the set of students currently...Ch. 3.1 - Prob. 3ECh. 3.1 - Prob. 4ECh. 3.1 - Prob. 5ECh. 3.1 - Prob. 6ECh. 3.1 - Prob. 7ECh. 3.1 - Prob. 8ECh. 3.1 - Prob. 9ECh. 3.1 - Prob. 10ECh. 3.1 - Prob. 11ECh. 3.1 - Prob. 12ECh. 3.1 - Prob. 13ECh. 3.1 - Define g:ZB by g(x)=|x|+1. Determine (with...Ch. 3.1 - Define f:AA by f(x)=3x+5. Determine (with reasons)...Ch. 3.1 - 16. Define by . Determine (with reasons) whether...Ch. 3.1 - Prob. 17ECh. 3.1 - Prob. 18ECh. 3.1 - Prob. 19ECh. 3.1 - Define f:RR by f(x)=3x3+x. Graph f to determine...Ch. 3.1 - 21. (a) Define by . Graph g to determine whether g...Ch. 3.1 - Prob. 22ECh. 3.1 - 23. Let a, b, c be real numbers and define by ....Ch. 3.1 - 24. For each of the following, find the largest...Ch. 3.1 - Prob. 25ECh. 3.1 - Let S be a set containing the number 5. Let...Ch. 3.1 - Prob. 27ECh. 3.1 - Prob. 28ECh. 3.1 - Prob. 29ECh. 3.1 - Prob. 30ECh. 3.1 - Prob. 31ECh. 3.1 - Prob. 32ECh. 3.1 - Prob. 33ECh. 3.1 - Prob. 34ECh. 3.2 - True/False Questions
The function defines by ...Ch. 3.2 - True/False Questions The function f:ZZ defines by...Ch. 3.2 - Prob. 3TFQCh. 3.2 - Prob. 4TFQCh. 3.2 - Prob. 5TFQCh. 3.2 - Prob. 6TFQCh. 3.2 - Prob. 7TFQCh. 3.2 - Prob. 8TFQCh. 3.2 - Prob. 9TFQCh. 3.2 - Prob. 10TFQCh. 3.2 - Let . Find the inverse of each of the following...Ch. 3.2 - 2. Define by . Find a formula for .
Ch. 3.2 - Define f:(,0][0,) by f(x)=x2. Find a formula for...Ch. 3.2 - 4. Define by . Find a formula for .
Ch. 3.2 - Prob. 5ECh. 3.2 - Prob. 6ECh. 3.2 - Show that each of the following functions f:AH is...Ch. 3.2 - Prob. 8ECh. 3.2 - Prob. 9ECh. 3.2 - Prob. 10ECh. 3.2 - 11. Let and define functions by and . Find
(a) ...Ch. 3.2 - Prob. 12ECh. 3.2 - Prob. 13ECh. 3.2 - Prob. 14ECh. 3.2 - Prob. 15ECh. 3.2 - Prob. 16ECh. 3.2 - 17. Let A denote the set . Let i denote the...Ch. 3.2 - Prob. 18ECh. 3.2 - Prob. 19ECh. 3.2 - Prob. 20ECh. 3.2 - Prob. 21ECh. 3.2 - Prob. 22ECh. 3.2 - Prob. 23ECh. 3.2 - Prob. 24ECh. 3.2 - Is the composition of two bijective functions...Ch. 3.2 - 26. Define by .
(a) Find the values of .
(b) Guess...Ch. 3.2 - Prob. 27ECh. 3.2 - Prob. 28ECh. 3.3 - True/False Questions
If sets A and B are in...Ch. 3.3 - Prob. 2TFQCh. 3.3 - Prob. 3TFQCh. 3.3 - Prob. 4TFQCh. 3.3 - True/False Questions If A and B are finite sets...Ch. 3.3 - True/False Questions If the conditions of...Ch. 3.3 - Prob. 7TFQCh. 3.3 - Prob. 8TFQCh. 3.3 - Prob. 9TFQCh. 3.3 - Prob. 10TFQCh. 3.3 - Prob. 1ECh. 3.3 - At first glance, the perfect squares 1, 4, 9, 16,...Ch. 3.3 - Prob. 3ECh. 3.3 - Prob. 4ECh. 3.3 - Prob. 5ECh. 3.3 - Prob. 6ECh. 3.3 - Prob. 7ECh. 3.3 - Prob. 8ECh. 3.3 - Prob. 9ECh. 3.3 - Prob. 10ECh. 3.3 - Prove that the notion of same cardinality is an...Ch. 3.3 - Prob. 12ECh. 3.3 - Prob. 13ECh. 3.3 - Prob. 14ECh. 3.3 - Prob. 15ECh. 3.3 - Prob. 16ECh. 3.3 - Prob. 17ECh. 3.3 - Prob. 18ECh. 3.3 - Prob. 19ECh. 3.3 - Prob. 20ECh. 3.3 - Prob. 21ECh. 3.3 - 22. Given an example of each of the following or...Ch. 3.3 - Prob. 23ECh. 3.3 - Prob. 24ECh. 3.3 - Prove that the points of a plane and the points of...Ch. 3.3 - Prob. 26ECh. 3.3 - 27. (a) Show that if A and B are countable sets...Ch. 3.3 - Prob. 28ECh. 3.3 - 29. Let S be the set of all real numbers in the...Ch. 3.3 - Let S be the set of all real numbers in the...Ch. 3.3 - Prob. 31ECh. 3 - Define by . Determine whether f is one-to-one.
Ch. 3 - Let f={(1,2),(2,3),(3,4),(4,1)} and...Ch. 3 - Prob. 3RECh. 3 - Prob. 4RECh. 3 -
5. Answer these questions for each of the given...Ch. 3 - Prob. 6RECh. 3 - Prob. 7RECh. 3 - Prob. 8RECh. 3 - Prob. 9RECh. 3 - Prob. 10RECh. 3 - Prob. 11RECh. 3 - Prob. 12RECh. 3 - Prob. 13RECh. 3 - Prob. 14RECh. 3 - Prob. 15RECh. 3 - Prob. 16RECh. 3 - Prob. 17RECh. 3 - Prob. 18RECh. 3 - Prob. 19RECh. 3 - Let S be the set of all real numbers in the...Ch. 3 - Prob. 21RE
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