Elementary Statistics Using the TI-83/84 Plus Calculator
4th Edition
ISBN: 9780558737030
Author: Triola
Publisher: PEARSON
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 3.3, Problem 18BSC
To determine
Compute the
Explain whether the 15 pounds (or 6.8 kg) is unusual or not. If not unusual, the weight gain of 15 pounds (or 6.8 kg) supports the legend of the freshman 15"or not.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
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.)
Problem 4. Margrabe formula and the Greeks (20 pts)
In the homework, we determined the Margrabe formula for the price of an option allowing you to
swap an x-stock for a y-stock at time T. For stocks with initial values xo, yo, common volatility
σ and correlation p, the formula was given by
Fo=yo (d+)-x0Þ(d_),
where
In (±²
Ꭲ
d+
õ√T
and
σ = σ√√√2(1 - p).
дго
(a) We want to determine a "Greek" for ỡ on the option: find a formula for
θα
(b) Is
дго
θα
positive or negative?
(c) We consider a situation in which the correlation p between the two stocks increases: what
can you say about the price Fo?
(d) Assume that yo< xo and p = 1. What is the price of the option?
We consider a 4-dimensional stock price model given (under P) by
dẴ₁ = µ· Xt dt + йt · ΣdŴt
where (W) is an n-dimensional Brownian motion,
π = (0.02, 0.01, -0.02, 0.05),
0.2
0
0
0
0.3
0.4
0
0
Σ=
-0.1
-4a За
0
0.2
0.4 -0.1 0.2)
and a E R. We assume that ☑0 = (1, 1, 1, 1) and that the interest rate on the market is r = 0.02.
(a) Give a condition on a that would make stock #3 be the one with largest volatility.
(b) Find the diversification coefficient for this portfolio as a function of a.
(c) Determine the maximum diversification coefficient d that you could reach by varying the
value of a?
2
Chapter 3 Solutions
Elementary Statistics Using the TI-83/84 Plus Calculator
Ch. 3.2 - Prob. 1BSCCh. 3.2 - 2. Average The web site IncomeTaxList.com lists...Ch. 3.2 - Prob. 3BSCCh. 3.2 - Measures of Center In what sense are the mean,...Ch. 3.2 - Prob. 5BSCCh. 3.2 - In Exercises 5-20, find the (a) mean, (b) median,...Ch. 3.2 - In Exercises 5-20, find the (a) mean, (b) median,...Ch. 3.2 - In Exercises 5-20, find the (a) mean, (b) median,...Ch. 3.2 - In Exercises 5-20, find the (a) mean, (b) median,...Ch. 3.2 - In Exercises 5-20, find the (a) mean, (b) median,...
Ch. 3.2 - In Exercises 5-20, find the (a) mean, (b) median,...Ch. 3.2 - In Exercises 5-20, find the (a) mean, (b) median,...Ch. 3.2 - In Exercises 5-20, find the (a) mean, (b) median,...Ch. 3.2 - In Exercises 5-20, find the (a) mean, (b) median,...Ch. 3.2 - In Exercises 5-20, find the (a) mean, (b) median,...Ch. 3.2 - In Exercises 5-20, find the (a) mean, (b) median,...Ch. 3.2 - In Exercises 5-20, find the (a) mean, (b) median,...Ch. 3.2 - In Exercises 5-20, find the (a) mean, (b) median,...Ch. 3.2 - In Exercises 5-20, find the (a) mean, (b) median,...Ch. 3.2 - In Exercises 5-20, find the (a) mean, (b) median,...Ch. 3.2 - In Exercises 21-24, find the mean and median for...Ch. 3.2 - In Exercises 2124, find the mean and median for...Ch. 3.2 - In Exercises 21-24, find the mean and median for...Ch. 3.2 - In Exercises 21-24, find the mean and median for...Ch. 3.2 - Prob. 25BSCCh. 3.2 - Prob. 26BSCCh. 3.2 - Prob. 27BSCCh. 3.2 - Prob. 28BSCCh. 3.2 - Prob. 29BSCCh. 3.2 - Prob. 30BSCCh. 3.2 - Prob. 31BSCCh. 3.2 - Prob. 32BSCCh. 3.2 - 33. Degrees of Freedom Carbon monoxide is measured...Ch. 3.2 - Prob. 34BBCh. 3.2 - Prob. 35BBCh. 3.2 - Prob. 36BBCh. 3.2 - Prob. 37BBCh. 3.2 - Prob. 38BBCh. 3.2 - Prob. 39BBCh. 3.3 - Prob. 1BSCCh. 3.3 - 2. Correct Statements? Which of the following...Ch. 3.3 - 3. Variation and Variance In statistics, how do...Ch. 3.3 - 4. Symbols Identify the symbols used for each of...Ch. 3.3 - In Exercises 5–20, find the range, variance, and...Ch. 3.3 - In Exercises 5–20, find the range, variance, and...Ch. 3.3 - In Exercises 5–20, find the range, variance, and...Ch. 3.3 - In Exercises 5–20, find the range, variance, and...Ch. 3.3 - In Exercises 5–20, find the range, variance, and...Ch. 3.3 - In Exercises 5–20, find the range, variance, and...Ch. 3.3 - In Exercises 5–20, find the range, variance, and...Ch. 3.3 - In Exercises 5–20, find the range, variance, and...Ch. 3.3 - In Exercises 5–20, find the range, variance, and...Ch. 3.3 - In Exercises 5–20, find the range, variance, and...Ch. 3.3 - In Exercises 5–20, find the range, variance, and...Ch. 3.3 - In Exercises 5–20, find the range, variance, and...Ch. 3.3 - In Exercises 5–20, find the range, variance, and...Ch. 3.3 - Large Data Sets from Appendix B. In Exercises...Ch. 3.3 - In Exercises 5–20, find the range, variance, and...Ch. 3.3 - In Exercises 5–20, find the range, variance, and...Ch. 3.3 - Prob. 21BSCCh. 3.3 - In Exercises 2124, find the coefficient of...Ch. 3.3 - Prob. 23BSCCh. 3.3 - Prob. 24BSCCh. 3.3 - Prob. 25BSCCh. 3.3 - Prob. 26BSCCh. 3.3 - Prob. 27BSCCh. 3.3 - Prob. 28BSCCh. 3.3 - Prob. 29BSCCh. 3.3 - Prob. 30BSCCh. 3.3 - Prob. 31BSCCh. 3.3 - Prob. 32BSCCh. 3.3 - Prob. 33BSCCh. 3.3 - Identifying Unusual Values with the Range Rule of...Ch. 3.3 - Identifying Unusual Values with the Range Rule of...Ch. 3.3 - Identifying Unusual Values with the Range Rule of...Ch. 3.3 - Prob. 37BSCCh. 3.3 - Prob. 38BSCCh. 3.3 - Prob. 39BSCCh. 3.3 - Prob. 40BSCCh. 3.3 - Prob. 41BSCCh. 3.3 - Prob. 42BSCCh. 3.3 - Prob. 43BSCCh. 3.3 - Chebyshevs Theorem Based on Data Set 3 Body...Ch. 3.3 - Prob. 45BBCh. 3.3 - Prob. 46BBCh. 3.4 - Prob. 1BSCCh. 3.4 - z Scores If your score on your next statistics...Ch. 3.4 - 3. Boxplots Shown below is a STATDISK-generated...Ch. 3.4 - 4. Measures of Location The values of P50, Q2 and...Ch. 3.4 - z Scores. In Exercises 5-8, express all z scores...Ch. 3.4 - z Scores. In Exercises 5-8, express all z scores...Ch. 3.4 - z Scores. In Exercises 5-8, express all z scores...Ch. 3.4 - z Scores. In Exercises 5-8, express all z scores...Ch. 3.4 - Usual and Unusual Values. In Exercises 9-12,...Ch. 3.4 - Usual and Unusual Values. In Exercises 9-12,...Ch. 3.4 - Usual and Unusual Values. In Exercises 9-12,...Ch. 3.4 - Usual and Unusual Values. In Exercises 9-12,...Ch. 3.4 - Comparing Values. In Exercises 13-16, use z scores...Ch. 3.4 - Comparing Values. In Exercises 13-16, use z scores...Ch. 3.4 - Comparing Values. In Exercises 13-16, use z scores...Ch. 3.4 - Comparing Values. In Exercises 13-16, use z scores...Ch. 3.4 - Prob. 17BSCCh. 3.4 - Prob. 18BSCCh. 3.4 - Prob. 19BSCCh. 3.4 - Prob. 20BSCCh. 3.4 - In Exercises 21-28, use the same list of 24 sorted...Ch. 3.4 - In Exercises 21-28, use the same list of 24 sorted...Ch. 3.4 - In Exercises 21-28, use the same list of 24 sorted...Ch. 3.4 - In Exercises 21-28, use the same list of 24 sorted...Ch. 3.4 - In Exercises 21-28, use the same list of 24 sorted...Ch. 3.4 - In Exercises 21-28, use the same list of 24 sorted...Ch. 3.4 - In Exercises 21-28, use the same list of 24 sorted...Ch. 3.4 - In Exercises 21-28, use the same list of 24 sorted...Ch. 3.4 - Boxplots. In Exercises 29–32, use the given data...Ch. 3.4 - Boxplots. In Exercises 29–32, use the given data...Ch. 3.4 - Boxplots. In Exercises 29–32, use the given data...Ch. 3.4 - Boxplots. In Exercises 29–32, use the given data...Ch. 3.4 - Prob. 33BSCCh. 3.4 - Prob. 34BSCCh. 3.4 - Prob. 35BSCCh. 3.4 - Prob. 36BSCCh. 3.4 - Prob. 37BBCh. 3.4 - Prob. 38BBCh. 3 - Prob. 1CQQCh. 3 - Prob. 2CQQCh. 3 - Prob. 3CQQCh. 3 - Prob. 4CQQCh. 3 - Prob. 5CQQCh. 3 - Prob. 6CQQCh. 3 - Prob. 7CQQCh. 3 - Prob. 8CQQCh. 3 - Prob. 9CQQCh. 3 - Prob. 10CQQCh. 3 - Prob. 1RECh. 3 - Prob. 2RECh. 3 - Prob. 3RECh. 3 - Prob. 4RECh. 3 - Prob. 5RECh. 3 - Prob. 8RECh. 3 - Prob. 9RECh. 3 - Prob. 10RECh. 3 - Prob. 1CRECh. 3 - Prob. 2CRECh. 3 - Prob. 3CRECh. 3 - Prob. 5CRECh. 3 - Prob. 6CRECh. 3 - 7. Sampling Shortly after the World Trade Center...Ch. 3 - Prob. 8CRE
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, statistics and related others by exploring similar questions and additional content below.Similar questions
- Question 1. Your manager asks you to explain why the Black-Scholes model may be inappro- priate for pricing options in practice. Give one reason that would substantiate this claim? Question 2. We consider stock #1 and stock #2 in the model of Problem 2. Your manager asks you to pick only one of them to invest in based on the model provided. Which one do you choose and why ? Question 3. Let (St) to be an asset modeled by the Black-Scholes SDE. Let Ft be the price at time t of a European put with maturity T and strike price K. Then, the discounted option price process (ert Ft) t20 is a martingale. True or False? (Explain your answer.) Question 4. You are considering pricing an American put option using a Black-Scholes model for the underlying stock. An explicit formula for the price doesn't exist. In just a few words (no more than 2 sentences), explain how you would proceed to price it. Question 5. We model a short rate with a Ho-Lee model drt = ln(1+t) dt +2dWt. Then the interest rate…arrow_forwardIn 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.)arrow_forwardThe managing director of a consulting group has the accompanying monthly data on total overhead costs and professional labor hours to bill to clients. Complete parts a through c. Question content area bottom Part 1 a. Develop a simple linear regression model between billable hours and overhead costs. Overhead Costsequals=212495.2212495.2plus+left parenthesis 42.4857 right parenthesis42.485742.4857times×Billable Hours (Round the constant to one decimal place as needed. Round the coefficient to four decimal places as needed. Do not include the $ symbol in your answers.) Part 2 b. Interpret the coefficients of your regression model. Specifically, what does the fixed component of the model mean to the consulting firm? Interpret the fixed term, b 0b0, if appropriate. Choose the correct answer below. A. The value of b 0b0 is the predicted billable hours for an overhead cost of 0 dollars. B. It is not appropriate to interpret b 0b0, because its value…arrow_forward
- Using the accompanying Home Market Value data and associated regression line, Market ValueMarket Valueequals=$28,416+$37.066×Square Feet, compute the errors associated with each observation using the formula e Subscript ieiequals=Upper Y Subscript iYiminus−ModifyingAbove Upper Y with caret Subscript iYi and construct a frequency distribution and histogram. LOADING... Click the icon to view the Home Market Value data. Question content area bottom Part 1 Construct a frequency distribution of the errors, e Subscript iei. (Type whole numbers.) Error Frequency minus−15 comma 00015,000less than< e Subscript iei less than or equals≤minus−10 comma 00010,000 0 minus−10 comma 00010,000less than< e Subscript iei less than or equals≤minus−50005000 5 minus−50005000less than< e Subscript iei less than or equals≤0 21 0less than< e Subscript iei less than or equals≤50005000 9…arrow_forwardThe managing director of a consulting group has the accompanying monthly data on total overhead costs and professional labor hours to bill to clients. Complete parts a through c Overhead Costs Billable Hours345000 3000385000 4000410000 5000462000 6000530000 7000545000 8000arrow_forwardUsing the accompanying Home Market Value data and associated regression line, Market ValueMarket Valueequals=$28,416plus+$37.066×Square Feet, compute the errors associated with each observation using the formula e Subscript ieiequals=Upper Y Subscript iYiminus−ModifyingAbove Upper Y with caret Subscript iYi and construct a frequency distribution and histogram. Square Feet Market Value1813 911001916 1043001842 934001814 909001836 1020002030 1085001731 877001852 960001793 893001665 884001852 1009001619 967001690 876002370 1139002373 1131001666 875002122 1161001619 946001729 863001667 871001522 833001484 798001589 814001600 871001484 825001483 787001522 877001703 942001485 820001468 881001519 882001518 885001483 765001522 844001668 909001587 810001782 912001483 812001519 1007001522 872001684 966001581 86200arrow_forward
- For a binary asymmetric channel with Py|X(0|1) = 0.1 and Py|X(1|0) = 0.2; PX(0) = 0.4 isthe probability of a bit of “0” being transmitted. X is the transmitted digit, and Y is the received digit.a. Find the values of Py(0) and Py(1).b. What is the probability that only 0s will be received for a sequence of 10 digits transmitted?c. What is the probability that 8 1s and 2 0s will be received for the same sequence of 10 digits?d. What is the probability that at least 5 0s will be received for the same sequence of 10 digits?arrow_forwardV2 360 Step down + I₁ = I2 10KVA 120V 10KVA 1₂ = 360-120 or 2nd Ratio's V₂ m 120 Ratio= 360 √2 H I2 I, + I2 120arrow_forwardQ2. [20 points] An amplitude X of a Gaussian signal x(t) has a mean value of 2 and an RMS value of √(10), i.e. square root of 10. Determine the PDF of x(t).arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
MATLAB: An Introduction with ApplicationsStatisticsISBN:9781119256830Author:Amos GilatPublisher:John Wiley & Sons Inc
Probability and Statistics for Engineering and th...StatisticsISBN:9781305251809Author:Jay L. DevorePublisher:Cengage Learning
Statistics for The Behavioral Sciences (MindTap C...StatisticsISBN:9781305504912Author:Frederick J Gravetter, Larry B. WallnauPublisher:Cengage Learning
Elementary Statistics: Picturing the World (7th E...StatisticsISBN:9780134683416Author:Ron Larson, Betsy FarberPublisher:PEARSON
The Basic Practice of StatisticsStatisticsISBN:9781319042578Author:David S. Moore, William I. Notz, Michael A. FlignerPublisher:W. H. Freeman
Introduction to the Practice of StatisticsStatisticsISBN:9781319013387Author:David S. Moore, George P. McCabe, Bruce A. CraigPublisher:W. H. Freeman
MATLAB: An Introduction with Applications
Statistics
ISBN:9781119256830
Author:Amos Gilat
Publisher:John Wiley & Sons Inc
Probability and Statistics for Engineering and th...
Statistics
ISBN:9781305251809
Author:Jay L. Devore
Publisher:Cengage Learning
Statistics for The Behavioral Sciences (MindTap C...
Statistics
ISBN:9781305504912
Author:Frederick J Gravetter, Larry B. Wallnau
Publisher:Cengage Learning
Elementary Statistics: Picturing the World (7th E...
Statistics
ISBN:9780134683416
Author:Ron Larson, Betsy Farber
Publisher:PEARSON
The Basic Practice of Statistics
Statistics
ISBN:9781319042578
Author:David S. Moore, William I. Notz, Michael A. Fligner
Publisher:W. H. Freeman
Introduction to the Practice of Statistics
Statistics
ISBN:9781319013387
Author:David S. Moore, George P. McCabe, Bruce A. Craig
Publisher:W. H. Freeman
The Shape of Data: Distributions: Crash Course Statistics #7; Author: CrashCourse;https://www.youtube.com/watch?v=bPFNxD3Yg6U;License: Standard YouTube License, CC-BY
Shape, Center, and Spread - Module 20.2 (Part 1); Author: Mrmathblog;https://www.youtube.com/watch?v=COaid7O_Gag;License: Standard YouTube License, CC-BY
Shape, Center and Spread; Author: Emily Murdock;https://www.youtube.com/watch?v=_YyW0DSCzpM;License: Standard Youtube License