Discrete Mathematics with Graph Theory
3rd Edition
ISBN: 9780131679955
Author: Edgar G. Goodaire
Publisher: Prentice Hall
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Chapter 3.2, Problem 5E
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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.
Please 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.
This 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)…
Chapter 3 Solutions
Discrete Mathematics with Graph Theory
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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- 5. [-/1 Points] DETAILS MY NOTES SESSCALCET2 6.5.AE.003. y y= ex² 0 Video Example x EXAMPLE 3 (a) Use the Midpoint Rule with n = 10 to approximate the integral कर L'ex² dx. (b) Give an upper bound for the error involved in this approximation. SOLUTION 8+2 1 L'ex² d (a) Since a = 0, b = 1, and n = 10, the Midpoint Rule gives the following. (Round your answer to six decimal places.) dx Ax[f(0.05) + f(0.15) + ... + f(0.85) + f(0.95)] 0.1 [0.0025 +0.0225 + + e0.0625 + 0.1225 e0.3025 + e0.4225 + e0.2025 + + e0.5625 €0.7225 +0.9025] The figure illustrates this approximation. (b) Since f(x) = ex², we have f'(x) = 0 ≤ f'(x) = < 6e. ASK YOUR TEACHER and f'(x) = Also, since 0 ≤ x ≤ 1 we have x² ≤ and so Taking K = 6e, a = 0, b = 1, and n = 10 in the error estimate, we see that an upper bound for the error is as follows. (Round your final answer to five decimal places.) 6e(1)3 e 24( = ≈arrow_forward1. Consider the following preference ballots: Number of voters Rankings 6 5 4 2 1st choice A DCB DC 2nd choice B B D 3rd choice DCBD 4th choice CA AAA For each of the four voting systems we have studied, determine who would win the election in each case. (Remember: For plurality with runoff, all but the top two vote-getters are simultaneously eliminated at the end of round 1.)arrow_forwardPractice k Help ises A 96 Anewer The probability that you get a sum of at least 10 is Determine the number of ways that the specified event can occur when two number cubes are rolled. 1. Getting a sum of 9 or 10 3. Getting a sum less than 5 2. Getting a sum of 6 or 7 4. Getting a sum that is odd Tell whether you would use the addition principle or the multiplication principle to determine the total number of possible outcomes for the situation described. 5. Rolling three number cubes 6. Getting a sum of 10 or 12 after rolling three number cubes A set of playing cards contains four groups of cards designated by color (black, red, yellow, and green) with cards numbered from 1 to 14 in each group. Determine the number of ways that the specified event can occur when a card is drawn from the set. 7. Drawing a 13 or 14 9. Drawing a number less than 4 8. Drawing a yellow or green card 10. Drawing a black, red, or green car The spinner is divided into equal parts. Find the specified…arrow_forward
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