Ten Lessons in Introductory Sociology
2nd Edition
ISBN: 9780190663872
Author: Kenneth A. Gould; Tammy L. Lewis
Publisher: Oxford University Press Academic US
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Textbook Question
Chapter 5, Problem 124CRE
Cubes A hat contains a number of cubes: 15 red, 10 white, 5 blue, and 20 black. One cube is chosen at random. What is the
a. A red cube?
b. Not a red cube?
c. A cube that is white OR black?
d. A cube that is neither white nor black?
e. What do the answers to part a and part b add up to and why?
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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.
Problem 1.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%.
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.(d) We assume that you sell the American put to a market participant A for the pricefound in (b). Explain how you act on the market…
What is the standard scores associated to the left of z is 0.1446
Chapter 5 Solutions
Ten Lessons in Introductory Sociology
Ch. 5 - Simulation (Example 1) If we flip a coin 10 times,...Ch. 5 - Simulation Suppose you are carrying out a...Ch. 5 - Empirical versus Theoretical A Monopoly player...Ch. 5 - Empirical versus Theoretical A person was trying...Ch. 5 - Empirical vs. Theoretical A friend flips a coin 10...Ch. 5 - Empirical vs. Theoretical A magician claims that...Ch. 5 - Criminal Court Judges Criminal cases are assigned...Ch. 5 - Random Assignment of Professors A study randomly...Ch. 5 - Which of the following numbers could not be...Ch. 5 - Which of the following numbers could not be...
Ch. 5 - Cards (Example 2) There are four suits: clubs ,...Ch. 5 - Playing Cards Refer to exercise 5.11 for...Ch. 5 - Guessing on Tests a. On a true/false quiz in which...Ch. 5 - Guessing on Tests Consider a multiple-choice test...Ch. 5 - Four Children (Example 3) The sample space given...Ch. 5 - Three Coins The sample shows the possible...Ch. 5 - Birthdays What is the probability that a baby will...Ch. 5 - Playing Cards If one card is selected from a...Ch. 5 - College Poll A StatCrunch poll asked people if...Ch. 5 - College Poll Refer to the table given for Exercise...Ch. 5 - College Pol: “AND” (Example4) Refer to the table...Ch. 5 - College Poll: “AND” Refer to the table given for...Ch. 5 - College Poll: “OR” (Example 5) Refer to the table...Ch. 5 - College Poll: OR Refer to the table given for...Ch. 5 - College Poll: "OR" (Example 6) Refer to the table...Ch. 5 - College Poll: OR Refer to the table given for...Ch. 5 - College Poll: Mutually Exclusive (Example 7)...Ch. 5 - College Poll: Not Mutually Exclusive Refer to the...Ch. 5 - Mutually Exclusive Suppose a person is selected at...Ch. 5 - Mutually Exclusive Suppose a person is selected at...Ch. 5 - "OR" for Homeowners In the United States, the...Ch. 5 - "OR" with Rain Suppose a weather forecaster says...Ch. 5 - Fair Die (Example 8) Roll a fair six-sided die. a....Ch. 5 - Roll a Die Roll a fair six-sided die. a. What is...Ch. 5 - Grades Assume that the only grades possible in a...Ch. 5 - Changing Multiple-Choice Answers One of the...Ch. 5 - Voting Suppose that in an election, adults are...Ch. 5 - Ages The mothers of Mrs. Moss's first grade...Ch. 5 - "AND" and "OR" Consider these categories of...Ch. 5 - "AND" and "OR" Assume that we are talking about...Ch. 5 - "AND" and "OR" Considering all the adults in the...Ch. 5 - "AND" and "OR" Considering all the students at...Ch. 5 - Thumbtacks When a certain type of thumbtack is...Ch. 5 - Thumbtacks When a certain type of thumbtack is...Ch. 5 - Multiple-Choice Exam An exam consists of 12...Ch. 5 - Driving Exam A driving exam consists of 30...Ch. 5 - College poll Again: Is College Worth it (Example...Ch. 5 - College Poll A person is selected randomly from...Ch. 5 - College Poll (Example 10) Use the data given in...Ch. 5 - College Poll Use the data given in Exercise 5.47....Ch. 5 - Independent? Suppose a person is chosen at random....Ch. 5 - Independent? About 12#37; of men and 10#37; of...Ch. 5 - Independent? Suppose a person is chosen at random....Ch. 5 - Independent? Ring sizes typically range from about...Ch. 5 - College Poll (Example 11) Refer to the table in...Ch. 5 - College Poll Assume a person is selected randomly...Ch. 5 - Hand Folding (Example 13) When people fold their...Ch. 5 - Dice When two dice are rolled, is the event “the...Ch. 5 - Happiness and Tradition Views (Example 13) In the...Ch. 5 - Happiness Using the table in Exercise 5.59,...Ch. 5 - Coin (Example 15) Imagine flipping three fair...Ch. 5 - Die Imagine rolling a fair six-sided die three...Ch. 5 - Die Sequences (Example 16) Roll a fair six-sided...Ch. 5 - Babies Assume that babies born are equally likely...Ch. 5 - Recidivism (Example 16) Florida's recidivism rate...Ch. 5 - Seat Belt Use Scat belt use in Michigan in 2012 is...Ch. 5 - Cervical Cancer (Example 18) According to a study...Ch. 5 - Cervical Cancer About 8 women in 100,000 have...Ch. 5 - Simulating Coin Flips (Example 18) a. Simulate...Ch. 5 - Simulation a. Explain how you could use digits...Ch. 5 - Law of Large Numbers Refer to Histograms A, B, and...Ch. 5 - Law of Large Numbers The table shows the results...Ch. 5 - Coin Flips Imagine flipping a fair coin many...Ch. 5 - Coin Flips, Again Refer to the following figure....Ch. 5 - Law of Large Numbers: Gambling Betty and Jane are...Ch. 5 - LLN: Grandchildren Consider two pairs of...Ch. 5 - LLN: Coin If you flip a fair coin repeatedly and...Ch. 5 - LLN: Die The graph shows the average when a...Ch. 5 - Jury Duty A jury is supposed to represent the...Ch. 5 - Left-handed Some estimates say that 10#37; of the...Ch. 5 - Simulation: Four-Sided Die a. Explain how you...Ch. 5 - Simulation: Six-Sided Die a. Explain how you could...Ch. 5 - Capitalism According to a Pew poll conducted in...Ch. 5 - Socialism According to Pew poll conducted in 2012,...Ch. 5 - Independent Variables Use your general knowledge...Ch. 5 - Independent Variables Use your general knowledge...Ch. 5 - Death Penalty According to a Gallup poll conducted...Ch. 5 - Gay and Lesbian Relationships According to a...Ch. 5 - Internet Access A 2013 Pew poll said that 93 of...Ch. 5 - SAT ores The probability of a randomly selected...Ch. 5 - Birthdays Suppose all the days of the week are...Ch. 5 - Pass Rate of Written Driver’s Exam In California,...Ch. 5 - Rich Happier 2012 A Gallup poll asked, "Do you...Ch. 5 - Rich Happier 1990 A Gallup poll asked, "Do you...Ch. 5 - Likely to Become Rich? A Gallup poll conducted in...Ch. 5 - Benefits from Rich A Gallup poll conducted in 2012...Ch. 5 - Virginia Juveniles In Virginia, in 2010,...Ch. 5 - California Recidivism In California, the...Ch. 5 - California Recidivism and Gender Women return to...Ch. 5 - Blue Eyes About 17#37; of American men have blue...Ch. 5 - Construct a two-way table with 60 women and 80 men...Ch. 5 - Construct a two-way table with 60 women and 80 men...Ch. 5 - Law of Large Numbers A famous study by Amos...Ch. 5 - Law of Large Numbers A certain professional...Ch. 5 - Simulating Guessing on a Multiple-Choice Test...Ch. 5 - Simulating Guessing on a True/False Test Perform a...Ch. 5 - Red Light/Green Light A busy street has three...Ch. 5 - Soda A soda-bottling plant has a flaw in that...Ch. 5 - GSS: Political Party The General Social Survey...Ch. 5 - GSS: Political Party Refer to the table given in...Ch. 5 - GSS: AND Refer to the table given in Exercise...Ch. 5 - GSS: AND Refer to the table given in Exercise...Ch. 5 - GSS: OR Select someone at random from the 1858...Ch. 5 - GSS: OR Select someone at random from the 1858...Ch. 5 - GSS: OR Assume one person is chosen randomly from...Ch. 5 - GSS: OR Assume that one person is chosen randomly...Ch. 5 - GSS: Mutually Exclusive Referring to the table...Ch. 5 - GSS: Mutually Exclusive Referring to the table...Ch. 5 - Political Party, Again A person is selected...Ch. 5 - Political Party Use the table in Exercise 5.109. A...Ch. 5 - Political Party, Again Refer to the table for...Ch. 5 - Party, Again Refer to the table for Exercise...Ch. 5 - Coin Flips Let H stand for heads and let T stand...Ch. 5 - Cubes A hat contains a number of cubes: 15 red, 10...Ch. 5 - Mutually Exclusive Suppose a person is selected at...Ch. 5 - Mutually Exclusive Suppose a person is selected at...Ch. 5 - “OR” The Humane society of the United States...Ch. 5 - “OR” Suppose you discovered that on your college...Ch. 5 - UFOs When two people meet, they are sometimes...Ch. 5 - Seat Belt Use In 2009, the National Highway...Ch. 5 - Independent Imagine rolling a red die and a blue...Ch. 5 - Mutually Exclusive Imagine rolling a red die and a...Ch. 5 - Opinion about Nurses A Gallup Poll from December...Ch. 5 - Climate Change A Gallup poll from December of 2009...
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