Basic Technical Mathematics
11th Edition
ISBN: 9780134437705
Author: Washington
Publisher: PEARSON
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Chapter 3.5, Problem 12E
To determine
To graph: The given function
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Tri-County Utilities, Inc., supplies natural gas to customers in a three-county area. The company purchases natural gas from two companies: Southern Gas and Northwest Gas.
Demand forecasts for the coming winter season are as follows: Hamilton County, 400 units; Butler County, 200 units; and Clermont County, 300 units. Contracts to provide the following quantities have been written: Southern Gas, 500 units; and Northwest Gas, 400 units. Distribution costs for the counties vary, depending upon the location of the suppliers. The distribution costs per unit (in thousands of dollars)
are as follows.
From
To
Hamilton Butler
Clermont
Southern Gas
10
20
15
Northwest Gas
12
15
18
(a) Develop a network representation of this problem. (Submit a file with a maximum size of 1 MB.)
Choose File No file chosen
Assignment 3 graph.docx
Score: 1 out of 1
Comment:
(b) Develop a linear programming model that can be used to determine the plan that will minimize total distribution costs (in thousands of…
Use the method of undetermined coefficients to solve the given nonhomogeneous system.
dx
dt
=
2x + 3y − 8
dy
dt
=
−x − 2y + 6
X(t) =
As discussed in Section 8.3, the Markowitz model uses the variance of the portfolio as the measure of risk. However, variance includes deviations both below and above the mean return. Semivariance includes only deviations below the mean and is considered by many to be a better measure of risk.
(a)
Develop a model that minimizes semivariance for the Hauck Financial data given in the file HauckData with a required return of 10%.
Assume
that the five planning scenarios in the Hauck Financial Services model are equally likely to occur. Hint: Modify model (8.10)–(8.19). Define a variable ds for each scenario and let
ds ≥ R − Rs
with
ds ≥ 0.
Then make the objective function:
Min
1
5
5
s = 1
ds2.
Let
FS = proportion of portfolio invested in the foreign stock mutual fund
IB = proportion of portfolio invested in the intermediate-term bond fund
LG = proportion of portfolio invested in the large-cap growth fund
LV = proportion of portfolio invested in the large-cap value fund…
Chapter 3 Solutions
Basic Technical Mathematics
Ch. 3.1 - EXAMPLE 5
If , then substitute a3 for t
For the...Ch. 3.1 - EXAMPLE 7
For the functions f(x) = 5x − 3 and g(x)...Ch. 3.1 - In Exercises 1–4, solve the given problems related...Ch. 3.1 - Prob. 2ECh. 3.1 - In Exercises 1–4, solve the given problems related...Ch. 3.1 - Prob. 4ECh. 3.1 - In Exercises 5–12, find the indicated...Ch. 3.1 - In Exercises 5–12, find the indicated...Ch. 3.1 - In Exercises 5–12, find the indicated...Ch. 3.1 - In Exercises 5–12, find the indicated...
Ch. 3.1 - In Exercises 5–12, find the indicated...Ch. 3.1 - In Exercises 5–12, find the indicated...Ch. 3.1 - In Exercises 5–12, find the indicated functions.
A...Ch. 3.1 - In Exercises 5–12, find the indicated...Ch. 3.1 - In Exercises 13–24, evaluate the given...Ch. 3.1 - In Exercises 13–24, evaluate the given...Ch. 3.1 - In Exercises 13–24, evaluate the given...Ch. 3.1 - In Exercises 13–24, evaluate the given...Ch. 3.1 - In Exercises 13–24, evaluate the given...Ch. 3.1 - In Exercises 13–24, evaluate the given...Ch. 3.1 - In Exercises 13–24, evaluate the given...Ch. 3.1 - In Exercises 13–24, evaluate the given...Ch. 3.1 - In Exercises 13–24, evaluate the given...Ch. 3.1 - In Exercises 13–24, evaluate the given...Ch. 3.1 - In Exercises 13–24, evaluate the given...Ch. 3.1 - In Exercises 13–24, evaluate the given...Ch. 3.1 - In Exercises 25–28, evaluate the given functions....Ch. 3.1 - In Exercises 25–28, evaluate the given functions....Ch. 3.1 - In Exercises 25–28, evaluate the given functions....Ch. 3.1 - In Exercises 25–28, evaluate the given functions....Ch. 3.1 - In Exercises 29–32, determine the function y =...Ch. 3.1 - In Exercises 29–32, determine the function y =...Ch. 3.1 - In Exercises 29–32, determine the function y =...Ch. 3.1 - Prob. 32ECh. 3.1 - Prob. 33ECh. 3.1 - Prob. 34ECh. 3.1 - Prob. 35ECh. 3.1 - Prob. 36ECh. 3.1 - Prob. 37ECh. 3.1 - Prob. 38ECh. 3.1 - Prob. 39ECh. 3.1 - In Exercises 39–42, write the equation as given by...Ch. 3.1 - In Exercises 39–42, write the equation as given by...Ch. 3.1 - In Exercises 39–42, write the equation as given by...Ch. 3.1 - In Exercises 43–52, solve the given problems.
A...Ch. 3.1 - In Exercises 43–52, solve the given...Ch. 3.1 - In Exercises 43–52, solve the given problems.
45....Ch. 3.1 - In Exercises 43–52, solve the given problems.
46....Ch. 3.1 - In Exercises 43–52, solve the given problems.
The...Ch. 3.1 - In Exercises 43–52, solve the given problems.
The...Ch. 3.1 - In Exercises 43–52, solve the given problems.
A...Ch. 3.1 - In Exercises 43–52, solve the given problems.
A...Ch. 3.1 -
(a) Explain the meaning of f [f(x)]. (b) Find f...Ch. 3.1 -
If f(x) = x and g(x) = x2, find (a) f [g(x)], and...Ch. 3.2 - Find the domain and range of the function .
Ch. 3.2 - Prob. 2PECh. 3.2 - In Example 8, find p as a function of r if there...Ch. 3.2 - In Exercises 1-4, solve the given problems related...Ch. 3.2 - Prob. 2ECh. 3.2 - In Exercises 1-4, solve the given problems related...Ch. 3.2 - Prob. 4ECh. 3.2 - Prob. 5ECh. 3.2 - Prob. 6ECh. 3.2 - Prob. 7ECh. 3.2 - Prob. 8ECh. 3.2 - Prob. 9ECh. 3.2 - Prob. 10ECh. 3.2 - Prob. 11ECh. 3.2 - Prob. 12ECh. 3.2 - Prob. 13ECh. 3.2 - Prob. 14ECh. 3.2 - In Exercises 15-20, find the domain of the given...Ch. 3.2 - In Exercises 15-20, find the domain of the given...Ch. 3.2 - Prob. 17ECh. 3.2 - In Exercises 15-20, find the domain of the given...Ch. 3.2 - Prob. 19ECh. 3.2 - In Exercises 15-20, find the domain of the given...Ch. 3.2 - Prob. 21ECh. 3.2 - In Exercises 21-24, evaluate the indicated...Ch. 3.2 - In Exercises 21-24, evaluate the indicated...Ch. 3.2 - In Exercises 21-24, evaluate the indicated...Ch. 3.2 - Prob. 25ECh. 3.2 - In Exercises 25-38, determine the appropriate...Ch. 3.2 - Prob. 27ECh. 3.2 - In Exercises 25-38, determine the appropriate...Ch. 3.2 - Prob. 29ECh. 3.2 - In Exercises 25-38, determine the appropriate...Ch. 3.2 - Prob. 31ECh. 3.2 - Prob. 32ECh. 3.2 - Prob. 33ECh. 3.2 - Prob. 34ECh. 3.2 - Prob. 35ECh. 3.2 - In Exercises 25-38, determine the appropriate...Ch. 3.2 - Prob. 37ECh. 3.2 - Prob. 38ECh. 3.2 - Prob. 39ECh. 3.2 - Prob. 40ECh. 3.2 - Prob. 41ECh. 3.2 - Prob. 42ECh. 3.2 - Prob. 43ECh. 3.2 - Prob. 44ECh. 3.2 - Prob. 45ECh. 3.2 - Prob. 46ECh. 3.2 - Prob. 47ECh. 3.2 - Prob. 48ECh. 3.2 - Prob. 49ECh. 3.2 - Prob. 50ECh. 3.2 - Prob. 51ECh. 3.2 - Prob. 52ECh. 3.3 - Prob. 1PECh. 3.3 - Prob. 1ECh. 3.3 - Prob. 2ECh. 3.3 - In Exercises 3 and 4, determine (at least...Ch. 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 - Prob. 11ECh. 3.3 - Prob. 12ECh. 3.3 - Prob. 13ECh. 3.3 - Prob. 14ECh. 3.3 - Prob. 15ECh. 3.3 - Prob. 16ECh. 3.3 - In Exercises 15–18, determine the quadrant in...Ch. 3.3 - In Exercises 15–18, determine the quadrant in...Ch. 3.3 -
In Exercises 19–38, answer the given...Ch. 3.3 -
In Exercises 19–38, answer the given...Ch. 3.3 -
In Exercises 19–38, answer the given...Ch. 3.3 -
In Exercises 19–38, answer the given...Ch. 3.3 -
In Exercises 19–38, answer the given...Ch. 3.3 -
In Exercises 19–38, answer the given...Ch. 3.3 - In Exercises 19–38, answer the given...Ch. 3.3 - In Exercises 19–38, answer the given...Ch. 3.3 - In Exercises 19–38, answer the given...Ch. 3.3 - In Exercises 19–38, answer the given...Ch. 3.3 - In Exercises 19–38, answer the given...Ch. 3.3 -
In Exercises 19–38, answer the given...Ch. 3.3 - In Exercises 19–38, answer the given...Ch. 3.3 - In Exercises 19–38, answer the given...Ch. 3.3 - In Exercises 19–38, answer the given...Ch. 3.3 - In Exercises 19–38, answer the given...Ch. 3.3 - In Exercises 19–38, answer the given questions.
If...Ch. 3.3 - In Exercises 19–38, answer the given...Ch. 3.3 - In Exercises 19–38, answer the given questions.
On...Ch. 3.3 - Prob. 38ECh. 3.4 - Prob. 1PECh. 3.4 - Prob. 2PECh. 3.4 - Prob. 1ECh. 3.4 - Prob. 2ECh. 3.4 - Prob. 3ECh. 3.4 - Prob. 4ECh. 3.4 - In Exercises 5–36, graph the given functions.
5.
Ch. 3.4 - In Exercises 5–36, graph the given functions.
6. y...Ch. 3.4 - In Exercises 5–36, graph the given functions.
7. y...Ch. 3.4 - In Exercises 5–36, graph the given functions.
8. y...Ch. 3.4 - In Exercises 5–36, graph the given functions.
9. s...Ch. 3.4 - In Exercises 5−36, graph the given functions.
10....Ch. 3.4 - In Exercises 5–36, graph the given functions.
Ch. 3.4 - In Exercises 5–36, graph the given functions.
Ch. 3.4 - In Exercises 5–36, graph the given...Ch. 3.4 - Prob. 14ECh. 3.4 - Prob. 15ECh. 3.4 - Prob. 16ECh. 3.4 - In Exercises 5–36, graph the given functions.
Ch. 3.4 - In Exercises 5–36, graph the given functions.
y =...Ch. 3.4 - In Exercises 5–36, graph the given...Ch. 3.4 - In Exercises 5–36, graph the given...Ch. 3.4 - In Exercises 5–36, graph the given...Ch. 3.4 - In Exercises 5–36, graph the given...Ch. 3.4 - In Exercises 5–36, graph the given...Ch. 3.4 - In Exercises 5–36, graph the given functions.
24....Ch. 3.4 - In Exercises 5–36, graph the given functions.
y =...Ch. 3.4 - In Exercises 5–36, graph the given functions.
26....Ch. 3.4 - In Exercises 5–36, graph the given functions.
27....Ch. 3.4 - In Exercises 5–36, graph the given functions.
28....Ch. 3.4 - In Exercises 5–36, graph the given...Ch. 3.4 - In Exercises 5–36, graph the given functions.
Ch. 3.4 - In Exercises 5–36, graph the given...Ch. 3.4 - In Exercises 5–36, graph the given functions.
32....Ch. 3.4 - In Exercises 5–36, graph the given functions.
33....Ch. 3.4 - In Exercises 5–36, graph the given functions.
34....Ch. 3.4 - In Exercises 5–36, graph the given functions.
35....Ch. 3.4 - In Exercises 5–36, graph the given functions.
36....Ch. 3.4 - In Exercises 37–40, use the graph to determine the...Ch. 3.4 - In Exercises 37–40, use the graph to determine the...Ch. 3.4 - In Exercises 37–40, use the graph to determine the...Ch. 3.4 - In Exercises 37–40, use the graph to determine the...Ch. 3.4 - In Exercises 41–70, graph the indicated...Ch. 3.4 - In Exercises 41–70, graph the indicated...Ch. 3.4 - Prob. 43ECh. 3.4 - Prob. 44ECh. 3.4 - Prob. 45ECh. 3.4 - Prob. 46ECh. 3.4 - Prob. 47ECh. 3.4 - Prob. 48ECh. 3.4 - Prob. 49ECh. 3.4 - Prob. 50ECh. 3.4 - Prob. 51ECh. 3.4 - Prob. 52ECh. 3.4 - In Exercises 41–70, graph the indicated...Ch. 3.4 - Prob. 54ECh. 3.4 - Prob. 55ECh. 3.4 - Prob. 56ECh. 3.4 - Prob. 57ECh. 3.4 - Prob. 58ECh. 3.4 - Prob. 59ECh. 3.4 - Prob. 60ECh. 3.4 - Prob. 61ECh. 3.4 - Prob. 62ECh. 3.4 - Prob. 63ECh. 3.4 - Prob. 64ECh. 3.4 - In Exercises 41–70, graph the indicated...Ch. 3.4 - In Exercises 41–70, graph the indicated...Ch. 3.4 - Prob. 67ECh. 3.4 - Prob. 68ECh. 3.4 - Prob. 69ECh. 3.4 - Prob. 70ECh. 3.4 - In Exercises 71‒74, determine whether or not the...Ch. 3.4 - In Exercises 71–74, determine whether or not the...Ch. 3.4 - In Exercises 71–74, determine whether or not the...Ch. 3.4 - In Exercises 71–74, determine whether or not the...Ch. 3.5 - Prob. 1PECh. 3.5 - Prob. 2PECh. 3.5 - Prob. 3PECh. 3.5 - Prob. 1ECh. 3.5 - Prob. 2ECh. 3.5 - Prob. 3ECh. 3.5 - In Exercises 3–18, display the graphs of the given...Ch. 3.5 - Prob. 5ECh. 3.5 - Prob. 6ECh. 3.5 - Prob. 7ECh. 3.5 - Prob. 8ECh. 3.5 - Prob. 9ECh. 3.5 - Prob. 10ECh. 3.5 - Prob. 11ECh. 3.5 - Prob. 12ECh. 3.5 - Prob. 13ECh. 3.5 - Prob. 14ECh. 3.5 - Prob. 15ECh. 3.5 - Prob. 16ECh. 3.5 - Prob. 17ECh. 3.5 - Prob. 18ECh. 3.5 - Prob. 19ECh. 3.5 - In Exercises 19–28, use a graphing calculator to...Ch. 3.5 - Prob. 21ECh. 3.5 - Prob. 22ECh. 3.5 - Prob. 23ECh. 3.5 - Prob. 24ECh. 3.5 - Prob. 25ECh. 3.5 - Prob. 26ECh. 3.5 - Prob. 27ECh. 3.5 - Prob. 28ECh. 3.5 - Prob. 29ECh. 3.5 - Prob. 30ECh. 3.5 - Prob. 31ECh. 3.5 - Prob. 32ECh. 3.5 - Prob. 33ECh. 3.5 - Prob. 34ECh. 3.5 - Prob. 35ECh. 3.5 - Prob. 36ECh. 3.5 - Prob. 37ECh. 3.5 - Prob. 38ECh. 3.5 - Prob. 39ECh. 3.5 - Prob. 40ECh. 3.5 - In Exercises 41–48, a function and how it is to be...Ch. 3.5 - Prob. 42ECh. 3.5 - Prob. 43ECh. 3.5 - Prob. 44ECh. 3.5 - Prob. 45ECh. 3.5 - Prob. 46ECh. 3.5 - Prob. 47ECh. 3.5 - Prob. 48ECh. 3.5 - Prob. 49ECh. 3.5 - Prob. 50ECh. 3.5 - Prob. 51ECh. 3.5 - Prob. 52ECh. 3.5 - Prob. 53ECh. 3.5 - Prob. 54ECh. 3.5 - Prob. 55ECh. 3.5 - Prob. 56ECh. 3.5 - In Exercises 53–60, solve the indicated equations...Ch. 3.5 - In Exercises 53–60, solve the indicated equations...Ch. 3.5 - Prob. 59ECh. 3.5 - Prob. 60ECh. 3.5 - Prob. 61ECh. 3.5 - Prob. 62ECh. 3.5 - Prob. 63ECh. 3.5 - Prob. 64ECh. 3.5 - Prob. 65ECh. 3.5 - Prob. 66ECh. 3.5 - Prob. 67ECh. 3.5 - Prob. 68ECh. 3.6 - Prob. 1PECh. 3.6 - Prob. 1ECh. 3.6 - Prob. 2ECh. 3.6 - Prob. 3ECh. 3.6 - Prob. 4ECh. 3.6 - Prob. 5ECh. 3.6 - Prob. 6ECh. 3.6 - Prob. 7ECh. 3.6 - Prob. 8ECh. 3.6 - Prob. 9ECh. 3.6 - Prob. 10ECh. 3.6 - Prob. 11ECh. 3.6 - Prob. 12ECh. 3.6 - Prob. 13ECh. 3.6 - Prob. 14ECh. 3.6 - Prob. 15ECh. 3.6 - Prob. 16ECh. 3.6 - Prob. 17ECh. 3.6 - Prob. 18ECh. 3.6 - Prob. 19ECh. 3.6 - Prob. 20ECh. 3.6 - Prob. 21ECh. 3.6 - Prob. 22ECh. 3.6 - Prob. 23ECh. 3.6 - Prob. 24ECh. 3.6 - Prob. 25ECh. 3.6 - Prob. 26ECh. 3.6 - Prob. 27ECh. 3.6 - Prob. 28ECh. 3.6 - Prob. 29ECh. 3.6 - Prob. 30ECh. 3 - Prob. 1RECh. 3 - Determine each of the following as being either...Ch. 3 - Prob. 3RECh. 3 - Prob. 4RECh. 3 - Prob. 5RECh. 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 - Prob. 20RECh. 3 - Prob. 21RECh. 3 - Prob. 22RECh. 3 - Prob. 23RECh. 3 - Prob. 24RECh. 3 - Prob. 25RECh. 3 - Prob. 26RECh. 3 - Prob. 27RECh. 3 - Prob. 28RECh. 3 - In Exercises 29–38, plot the graphs of the given...Ch. 3 - Prob. 30RECh. 3 - Prob. 31RECh. 3 - Prob. 32RECh. 3 - Prob. 33RECh. 3 - Prob. 34RECh. 3 - Prob. 35RECh. 3 - Prob. 36RECh. 3 - Prob. 37RECh. 3 - Prob. 38RECh. 3 - Prob. 39RECh. 3 - Prob. 40RECh. 3 - Prob. 41RECh. 3 - Prob. 42RECh. 3 - Prob. 43RECh. 3 - Prob. 44RECh. 3 - Prob. 45RECh. 3 - Prob. 46RECh. 3 - Prob. 47RECh. 3 - Prob. 48RECh. 3 - Prob. 49RECh. 3 - Prob. 50RECh. 3 - Prob. 51RECh. 3 - Prob. 52RECh. 3 - Prob. 53RECh. 3 - Prob. 54RECh. 3 - Prob. 55RECh. 3 - Prob. 56RECh. 3 - Prob. 57RECh. 3 - Prob. 58RECh. 3 - Prob. 59RECh. 3 - Prob. 60RECh. 3 - Prob. 61RECh. 3 - Prob. 62RECh. 3 - Prob. 63RECh. 3 - Prob. 64RECh. 3 - Prob. 65RECh. 3 - Prob. 66RECh. 3 - Prob. 67RECh. 3 - Prob. 68RECh. 3 - Prob. 69RECh. 3 - Prob. 70RECh. 3 - Prob. 71RECh. 3 - Prob. 72RECh. 3 - Prob. 73RECh. 3 - Prob. 74RECh. 3 - Prob. 75RECh. 3 - Prob. 76RECh. 3 - Prob. 77RECh. 3 - Prob. 78RECh. 3 - Prob. 79RECh. 3 - Prob. 80RECh. 3 - Prob. 81RECh. 3 - Prob. 82RECh. 3 - Prob. 83RECh. 3 - Prob. 84RECh. 3 - Prob. 85RECh. 3 - Prob. 86RECh. 3 - Prob. 87RECh. 3 - Prob. 88RECh. 3 - Prob. 89RECh. 3 - Prob. 90RECh. 3 - Prob. 91RECh. 3 - Prob. 92RECh. 3 - Prob. 93RECh. 3 - Prob. 94RECh. 3 - Prob. 95RECh. 3 - Prob. 96RECh. 3 - Prob. 1PTCh. 3 - Prob. 2PTCh. 3 - Prob. 3PTCh. 3 - Prob. 4PTCh. 3 - Prob. 5PTCh. 3 - Prob. 6PTCh. 3 - Prob. 7PTCh. 3 - Prob. 8PTCh. 3 - Prob. 10PTCh. 3 - Prob. 11PTCh. 3 - From the table in Problem 11, find the voltage for...
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- Calculus lll May I please have the blank lines completed, and final statement defined as a result? Thank you for the support!arrow_forwardFor 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 B 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 55, 60, 63, 64, 65, 71, 83, 87, 88, 88, 89, 93\ 55,\ 60,\ 63,\ 64,\ 65,\ 71,\ 83,\ 87,\ 88,\ 88,\ 89,\ 93 55, 60, 63, 64, 65, 71, 83, 87, 88, 88, 89, 93 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, 91arrow_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_forward
- 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?arrow_forwardThe Course Name Real Analysis please Solve questions by Real Analysisarrow_forwardWe 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? 2arrow_forward
- 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_forward3. Consider the polynomial equation 6-iz+7z² - iz³ +z = 0 for which the roots are 3i, -2i, -i, and i. (a) Verify the relations between this roots and the coefficients of the polynomial. (b) Find the annulus region in which the roots lie.arrow_forward
- The 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_forward3. Consider the polynomial equation 6-iz+7z2-iz³ +z = 0 for which the roots are 3i, -2i, -i, and i. (a) Verify the relations between this roots and the coefficients of the polynomial. (b) Find the annulus region in which the roots lie.arrow_forwardWrite the equation of the trigonometric function shown in the graph. LO 5 4 3 2 1 y -5 -5 4 8 8 500 -1 -2 -3 -4 -5 x 5 15л 5л 25л 15л 35π 5л 4 8 2 8 4 8arrow_forward
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