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 65SE
Recidivism (Example 16) Florida's recidivism rate is
a. What is the
b. What is the probability that neither of them goes back to prison?
c. What is the probability that at least one goes back to prison?
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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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