Problem Solving Approach to Mathematics for Elementary School Teachers
13th Edition
ISBN: 9780135184097
Author: BILLSTEIN
Publisher: PEARSON CO
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Chapter 5.2B, Problem 15A
To determine
a)
To find:
The integer value of
To determine
b)
To find:
The integer value of
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Students have asked these similar questions
Several markets (Japan, Switzerland) introduced negative interest rates on their money market.
In this problem, we will consider an annual interest rate r < 0. We consider a stock modeled
by an N-period CRR model where each period is 1 year (At = 1) and the up and down factors
are u and d.
(a) We consider an American put option with strike price K and expiration T. Prove that if
<0, the optimal strategy is to wait until expiration T to exercise.
We consider an N-period CRR model where each period is 1 year (At = 1), the up factor is
u = 0.1, the down factor is d = e−0.3 and r = 0. We remind you that in the CRR model, the
stock price at time tn is modeled (under P) by
Sta
=
So exp (μtn + σ√AtZn),
where (Zn) is a simple symmetric random walk.
(a) Find the parameters μ and σ for the CRR model described above.
(b) Find P
Ste
So
55/50
€ > 1).
StN
(c) Find lim P
804-N
(d) Determine q. (You can use e- 1 x.)
Ste
(e) Find Q
So
(f) Find lim Q
004-N
StN
So
In this problem, we consider a 3-period stock market model with evolution given in Fig. 1 below.
Each period corresponds to one year. The interest rate is r = 0%.
16
22
28
12
16
12
8
4
2
time
Figure 1: Stock evolution for Problem 1.
(a) A colleague notices that in the model above, a movement up-down leads to the same value
as a movement down-up. He concludes that the model is a CRR model. Is your colleague
correct? (Explain your answer.)
(b) We consider a European put with strike price K = 10 and expiration T = 3 years. Find
the price of this option at time 0. Provide the replicating portfolio for the first period.
(c) In addition to the call above, we also consider a European call with strike price K = 10
and expiration T = 3 years. Which one has the highest price? (It is not necessary to
provide the price of the call.)
(d) We now assume a yearly interest rate r = 25%. We consider a Bermudan put option with
strike price K = 10. It works like a standard put, but you can exercise it…
Chapter 5 Solutions
Problem Solving Approach to Mathematics for Elementary School Teachers
Ch. 5.1 - Prob. 1MCCh. 5.1 - Prob. 2MCCh. 5.1 - Prob. 3MCCh. 5.1 - Prob. 4MCCh. 5.1 - Prob. 5MCCh. 5.1 - Prob. 6MCCh. 5.1 - Describe a realistic word problem that models...Ch. 5.1 - Prob. 8MCCh. 5.1 - a. I chose an integer. I then subtract 10 from the...Ch. 5.1 - Investigate how tides are measured and design an...
Ch. 5.1 - Prob. 11MCCh. 5.1 - Prob. 12MCCh. 5.1 - A fourth-grade student devised the following...Ch. 5.1 - Prob. 14MCCh. 5.1 - MATHEMATICAL CONNECTIONS A student had the...Ch. 5.1 - Prob. 16MCCh. 5.1 - Prob. 17MCCh. 5.1 - Prob. 18MCCh. 5.1 - On the School Book Page on p. 244, complete the...Ch. 5.1 - Prob. 1NAEPCh. 5.1 - Prob. 2NAEPCh. 5.1A - Find the additive inverse of each of the following...Ch. 5.1A - Simplify each of the following expressions. a. (2)...Ch. 5.1A - Evaluate each of the following expressions. a. |5|...Ch. 5.1A - Use the absolute value definition of addition to...Ch. 5.1A - Demonstrate each of the following additions using...Ch. 5.1A - Demonstrate each of the in exercise 5 following...Ch. 5.1A - Use a No. Line Model to compute the following...Ch. 5.1A - Use chip Model to compute the following...Ch. 5.1A - Prob. 9ACh. 5.1A - Prob. 10ACh. 5.1A - In each of following problems, write an addition...Ch. 5.1A - The Cowboys football team lost 6 yards on their...Ch. 5.1A - In golf, par is a score of zero. If you go over...Ch. 5.1A - Compute each of following expression. a. 2+(310)...Ch. 5.1A - In each of following problems, write both a...Ch. 5.1A - Simplify each of the following expressions as much...Ch. 5.1A - For which integers a, b and c does ab+c=a(bc)?...Ch. 5.1A - Place the integers 4,3,2,0,1,2,3,4 in the grid to...Ch. 5.1A - Let y=x1. Find the value of y in parts a-d when x...Ch. 5.1A - Determine the number of terms in the arithmetic...Ch. 5.1A - How could you explain the time change from the...Ch. 5.1A - Find all integer x, if there are any, such that...Ch. 5.1A - In each of the following equations, find all...Ch. 5.1A - An arithmetic sequence may have a positive or...Ch. 5.1A - Classify each of the following as true or false...Ch. 5.1A - Solve the following equations. a. x+7=3 b. 10+x=7...Ch. 5.1B - ASSESSMENT Find the additive inverse of each of...Ch. 5.1B - ASSESSMENT Simplify each of the following...Ch. 5.1B - ASSESSMENT Evaluate each of the following...Ch. 5.1B - Prob. 4ACh. 5.1B - Prob. 9ACh. 5.1B - ASSESSMENT In each of the following problems,...Ch. 5.1B - ASSESSMENT In each of the following problems,...Ch. 5.1B - Prob. 12ACh. 5.1B - Prob. 13ACh. 5.1B - ASSESSMENT Compute each of the following. a....Ch. 5.1B - Prob. 15ACh. 5.1B - ASSESSMENT Simplify each of the following...Ch. 5.1B - Prob. 17ACh. 5.1B - Prob. 18ACh. 5.1B - ASSESSMENT Let y=3x2. Find the value of y in parts...Ch. 5.1B - ASSESSMENT Determine the number of terms in the...Ch. 5.1B - Prob. 21ACh. 5.1B - ASSESSMENT Find all integers x, if there are any,...Ch. 5.1B - ASSESSMENT Let y=|x5|. Find the value of y in...Ch. 5.1B - ASSESSMENT An arithmetic sequence may have a...Ch. 5.1B - ASSESSMENT Classify each of the following as true...Ch. 5.1B - Prob. 26ACh. 5.2 - Explain whether (xy)(x+y) can be multiplied by...Ch. 5.2 - We use the equation (a+b)2=a2+2ab+b2 to find a...Ch. 5.2 - Consider the argument to show that (a)(b)=(ab) for...Ch. 5.2 - Prob. 4MCCh. 5.2 - Explain how to find the number of integers between...Ch. 5.2 - Prob. 6MCCh. 5.2 - The Swiss mathematician Leonhard Euler 1707-1783...Ch. 5.2 - Prob. 8MCCh. 5.2 - Prob. 10MCCh. 5.2 - Prob. 11MCCh. 5.2 - If n is an odd integer, is n2 even or odd? Justify...Ch. 5.2 - A seventh-grade student does not believe 52.The...Ch. 5.2 - A student computes 82(3) by writing 10(3)=30. How...Ch. 5.2 - Prob. 15MCCh. 5.2 - Mariyana felt that using absolute values with...Ch. 5.2 - In solving the problems 325, Annie changes it to...Ch. 5.2 - Prob. 18MCCh. 5.2 - Think about the Convince Me on page 261 and if it...Ch. 5.2 - Prob. 20MCCh. 5.2 - Prob. 21MCCh. 5.2 - Prob. 22MCCh. 5.2 - Prob. 23MCCh. 5.2 - Prob. 1NAEPCh. 5.2 - Prob. 2NAEPCh. 5.2 - Prob. 3NAEPCh. 5.2 - Prob. 4NAEPCh. 5.2A - Use patterns to show that (1)(1)=1Ch. 5.2A - Use the chip model to show the following. a)...Ch. 5.2A - Use the number line model to show that 2(4)=8Ch. 5.2A - In each of the following chip models, the...Ch. 5.2A - The number of students eating in the school...Ch. 5.2A - Use the definition of division to find each...Ch. 5.2A - Evaluate each of the following expressions, if...Ch. 5.2A - Evaluate each of the following products and then,...Ch. 5.2A - In each of the following, x and y are integers;y0....Ch. 5.2A - In a lab, the temperature of various chemical...Ch. 5.2A - The farmland acreage lost to family dwellings over...Ch. 5.2A - Illustrate the distributive property of...Ch. 5.2A - Compute each of the following. a. (2)3 b. (2)4 c....Ch. 5.2A - If x is an integer and x0, which of the following...Ch. 5.2A - Find all integer values of x for which the...Ch. 5.2A - If 48x is an integer and x is an integer what are...Ch. 5.2A - Identify the property of integers being...Ch. 5.2A - Prob. 18ACh. 5.2A - Multiply each of the following and combine terms...Ch. 5.2A - Find all integers x if any each of the following....Ch. 5.2A - Use the difference-of-squares formula to simplify...Ch. 5.2A - Factor each of the following expressions...Ch. 5.2A - Prob. 23ACh. 5.2A - In each of the following, find the next two terms....Ch. 5.2A - Find the missing terms in the following arithmetic...Ch. 5.2A - A hot air balloon descends at the rate of...Ch. 5.2A - A paper cup is 7in. tall with 1in. of that height...Ch. 5.2A - A scuba diver descended 450feet in 15 minutes at a...Ch. 5.2A - Prob. 29ACh. 5.2A - Your Sirius radio bill is 40 each month. You have...Ch. 5.2A - Prob. 31ACh. 5.2A - Prob. 32ACh. 5.2A - Uncle Bob has a debt of 2000. His five siblings...Ch. 5.2B - Use patterns to show that (2)(2)=4.Ch. 5.2B - Use the chip model to show the following. a....Ch. 5.2B - Prob. 3ACh. 5.2B - Prob. 4ACh. 5.2B - Prob. 5ACh. 5.2B - Prob. 6ACh. 5.2B - Prob. 7ACh. 5.2B - Prob. 8ACh. 5.2B - Prob. 9ACh. 5.2B - Prob. 10ACh. 5.2B - Prob. 11ACh. 5.2B - Prob. 12ACh. 5.2B - Compute each of the following. a. 10312 b. 10(312)...Ch. 5.2B - Prob. 14ACh. 5.2B - Prob. 15ACh. 5.2B - If 54x is an integer and x is an integer, what are...Ch. 5.2B - Identify the property of integers being...Ch. 5.2B - The quotient of two integers is 4. List four...Ch. 5.2B - Multiply each of the following and combine terms...Ch. 5.2B - Find all integers x if any that make the...Ch. 5.2B - Use the difference of squares formula to simplify...Ch. 5.2B - Factor each of the following expressions...Ch. 5.2B - Prob. 23ACh. 5.2B - In each of the following, find the next two terms....Ch. 5.2B - Prob. 25ACh. 5.2B - Prob. 26ACh. 5.2B - Prob. 27ACh. 5.2B - Prob. 28ACh. 5.2B - Prob. 29ACh. 5.2B - Jose has 250 in his bank account. His cell phone...Ch. 5.2B - Lake Mead is at an all-time low water level. The...Ch. 5.2B - Prob. 32ACh. 5.2B - Prob. 33ACh. 5.CR - Find the additive inverse of each of the...Ch. 5.CR - Prob. 2CRCh. 5.CR - For each of the following, find all possible...Ch. 5.CR - Prob. 4CRCh. 5.CR - Prob. 5CRCh. 5.CR - Prob. 6CRCh. 5.CR - Prob. 7CRCh. 5.CR - Prob. 8CRCh. 5.CR - Prob. 9CRCh. 5.CR - Prob. 10CRCh. 5.CR - The average high temperature in July in Barrow,...Ch. 5.CR - Prob. 12CRCh. 5.CR - Les has hiking Death Valley and began her hike at...Ch. 5.CR - Brian plays on his college golf team. Last spring...Ch. 5.CR - Two golfers completed one round of golf. The first...Ch. 5.CR - Roman civilization began in 509BCE and ended in...Ch. 5.CR - Pythagoras was born about 570BCE. Isaac Newton was...Ch. 5.CR - Prob. 18CRCh. 5.CR - Simplify each of the following expressions. a. 1x...Ch. 5.CR - Prob. 20CRCh. 5.CR - Prob. 21CRCh. 5.CR - Prob. 22CRCh. 5.CR - Prob. 23CRCh. 5.CR - Prob. 24CRCh. 5.CR - Prob. 25CRCh. 5.CR - Prob. 26CRCh. 5.CR - Prob. 27CRCh. 5.CR - Prob. 28CRCh. 5.CR - Prob. 29CRCh. 5.CR - Prob. 30CRCh. 5.CR - Prob. 31CRCh. 5.CR - Prob. 32CRCh. 5.CR - Prob. 33CRCh. 5.CR - The drawing below depicts an elevator. Explain...Ch. 5.CR - Prob. 35CRCh. 5.CR - Prob. 36CRCh. 5.CR - Prob. 37CRCh. 5.CR - Prob. 38CRCh. 5.CR - Prob. 39CRCh. 5.CR - Prob. 40CRCh. 5.CR - Prob. 41CRCh. 5.CR - Prob. 42CRCh. 5.CR - Prob. 43CRCh. 5.CR - Prob. 44CRCh. 5.CR - Prob. 45CRCh. 5.CR - Prob. 46CRCh. 5.CR - Prob. 47CRCh. 5 - Now Try this 1 Explain whether the sum of two...Ch. 5 - Now Try this 2 Model the subtraction 43 on a...Ch. 5 - Prob. 3NT
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