Bundle: Elementary Technical Mathematics, Loose-leaf Version, 12th + WebAssign Printed Access Card, Single-Term
12th Edition
ISBN: 9781337890199
Author: Dale Ewen
Publisher: Cengage Learning
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Chapter 6, Problem 17T
Given
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For 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, 91
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.)
Chapter 6 Solutions
Bundle: Elementary Technical Mathematics, Loose-leaf Version, 12th + WebAssign Printed Access Card, Single-Term
Ch. 6.1 - Solve each equation and check: x+2=8Ch. 6.1 - Prob. 2ECh. 6.1 - Prob. 3ECh. 6.1 - Solve each equation and check: 23n=6Ch. 6.1 - Solve each equation and check: w712=3Ch. 6.1 - Prob. 6ECh. 6.1 - Solve each equation and check: x13=1.5Ch. 6.1 - Solve each equation and check: n+12=5Ch. 6.1 - Solve each equation and check: 3b=15.6Ch. 6.1 - Solve each equation and check: y17=25
Ch. 6.1 - Prob. 11ECh. 6.1 - Prob. 12ECh. 6.1 - Solve each equation and check: 2=x5Ch. 6.1 - Prob. 14ECh. 6.1 - Solve each equation and check: 17=3+wCh. 6.1 - Solve each equation and check: 49=32+wCh. 6.1 - Solve each equation and check: 14b=57Ch. 6.1 - Prob. 18ECh. 6.1 - Prob. 19ECh. 6.1 - Prob. 20ECh. 6.1 - Solve each equation and check: x+5=5Ch. 6.1 - Prob. 22ECh. 6.1 - Prob. 23ECh. 6.1 - Solve each equation and check: 5x125=0Ch. 6.1 - Solve each equation and check: x7=56Ch. 6.1 - Prob. 26ECh. 6.1 - Prob. 27ECh. 6.1 - Prob. 28ECh. 6.1 - Solve each equation and check: x=2Ch. 6.1 - Prob. 30ECh. 6.1 - Prob. 31ECh. 6.1 - Prob. 32ECh. 6.1 - Solve each equation and check: 103x=16Ch. 6.1 - Prob. 34ECh. 6.1 - Prob. 35ECh. 6.1 - Solve each equation and check: x5+4=9Ch. 6.1 - Solve each equation and check: 2x=6Ch. 6.1 - Prob. 38ECh. 6.1 - Prob. 39ECh. 6.1 - Prob. 40ECh. 6.1 - Solve each equation and check: 3x5=12Ch. 6.1 - Prob. 42ECh. 6.1 - Prob. 43ECh. 6.1 - Prob. 44ECh. 6.1 - Solve each equation and check: 2x3=7Ch. 6.1 - Prob. 46ECh. 6.1 - Prob. 47ECh. 6.1 - Solve each equation and check: 28=73rCh. 6.1 - Solve each equation and check: 5x=6Ch. 6.1 - Prob. 50ECh. 6.1 - Solve each equation and check: 54y13=17.8Ch. 6.1 - Prob. 52ECh. 6.1 - Solve each equation and check: 28w56=8Ch. 6.1 - Prob. 54ECh. 6.1 - Prob. 55ECh. 6.1 - Prob. 56ECh. 6.1 - Solve each equation and check: 313y=41Ch. 6.1 - Prob. 58ECh. 6.1 - Solve each equation and check: 83=174xCh. 6.1 - Solve each equation and check: 58=5m+52Ch. 6.2 - Solve each equation and check: 4y+9=7y15Ch. 6.2 - Solve each equation and check: 2y45=yCh. 6.2 - Solve each equation and check: 5x+3=7x5Ch. 6.2 - Prob. 4ECh. 6.2 - Solve each equation and check: 2x+7=5x21Ch. 6.2 - Prob. 6ECh. 6.2 - Prob. 7ECh. 6.2 - Prob. 8ECh. 6.2 - Solve each equation and check: 3x+17=6x37Ch. 6.2 - Prob. 10ECh. 6.2 - Prob. 11ECh. 6.2 - Solve each equation and check: 5y+12=12y5Ch. 6.2 - Solve each equation and check: 3x2=5x+8Ch. 6.2 - Prob. 14ECh. 6.2 - Solve each equation and check: 4x+25=6x45Ch. 6.2 - Prob. 16ECh. 6.2 - Solve each equation and check: 5x+4=10x7Ch. 6.2 - Solve each equation and check: 3x2=5x20Ch. 6.2 - Solve each equation and check: 27+5x=9+3xCh. 6.2 - Solve each equation and check: 2y+8=5y1Ch. 6.2 - Solve each equation and check: 7x+18=11x36Ch. 6.2 - Prob. 22ECh. 6.2 - Prob. 23ECh. 6.2 - Prob. 24ECh. 6.2 - Solve each equation and check: 4x+2=8x7Ch. 6.2 - Solve each equation and check: 6x1=9x9Ch. 6.2 - Prob. 27ECh. 6.2 - Prob. 28ECh. 6.2 - Solve each equation and check: 3x+1=17xCh. 6.2 - Solve each equation and check: 174y=14yCh. 6.3 - Solve each equation and check: 2(x+3)6=10Ch. 6.3 - Solve each equation and check: 3x+5(x6)=32Ch. 6.3 - Prob. 3ECh. 6.3 - Solve each equation and check: 5m(2m7)=5Ch. 6.3 - Solve each equation and check: 16=3(x4)Ch. 6.3 - Prob. 6ECh. 6.3 - Solve each equation and check: 5a(3a+4)=8Ch. 6.3 - Prob. 8ECh. 6.3 - Solve each equation and check: 5a4(a3)=7Ch. 6.3 - Prob. 10ECh. 6.3 - Prob. 11ECh. 6.3 - Solve each equation and check: 278(2y)=13Ch. 6.3 - Solve each equation and check: 2a(5a7)=22Ch. 6.3 - Prob. 14ECh. 6.3 - Prob. 15ECh. 6.3 - Prob. 16ECh. 6.3 - Solve each equation and check: 3x7+17(1x)=6Ch. 6.3 - Prob. 18ECh. 6.3 - Solve each equation and check: 6b=27+3bCh. 6.3 - Solve each equation and check: 2a+4=a3Ch. 6.3 - Solve each equation and check: 4(25x)=3x+2Ch. 6.3 - Prob. 22ECh. 6.3 - Prob. 23ECh. 6.3 - Prob. 24ECh. 6.3 - Solve each equation and check: 6x+2=2(17x)Ch. 6.3 - Solve each equation and check: 6(17x)=24xCh. 6.3 - Prob. 27ECh. 6.3 - Prob. 28ECh. 6.3 - Solve each equation and check: 3(x+4)+3x=6Ch. 6.3 - Prob. 30ECh. 6.3 - Prob. 31ECh. 6.3 - Prob. 32ECh. 6.3 - Solve each equation and check: 9m3(m5)=7m3Ch. 6.3 - Prob. 34ECh. 6.3 - Prob. 35ECh. 6.3 - Prob. 36ECh. 6.3 - Solve each equation and check: 8(x5)=13xCh. 6.3 - Prob. 38ECh. 6.3 - Prob. 39ECh. 6.3 - Prob. 40ECh. 6.3 - Solve each equation and check:...Ch. 6.3 - Prob. 42ECh. 6.3 - Prob. 43ECh. 6.3 - Prob. 44ECh. 6.3 - Solve each equation and check: 4(y+2)=8(y4)+7Ch. 6.3 - Prob. 46ECh. 6.3 - Solve each equation and check:...Ch. 6.3 - Prob. 48ECh. 6.3 - Solve each equation and check: 12+8(2y+3)=(y+7)16Ch. 6.3 - Prob. 50ECh. 6.3 - Prob. 51ECh. 6.3 - Prob. 52ECh. 6.3 - Prob. 53ECh. 6.3 - Solve each equation and check: 2(5y+1)+16=4+3(y7)Ch. 6.3 - Prob. 55ECh. 6.3 - Prob. 56ECh. 6.3 - Solve each equation and check:...Ch. 6.3 - Prob. 58ECh. 6.3 - Prob. 59ECh. 6.3 - Prob. 60ECh. 6.4 - Solve each equation and check: 2x3=326Ch. 6.4 - Solve each equation and check: 5x7=2014Ch. 6.4 - Prob. 3ECh. 6.4 - Solve each equation and check: 53x=1313Ch. 6.4 - Solve each equation and check: 212x=712Ch. 6.4 - Solve each equation and check: 12+x3=52Ch. 6.4 - Prob. 7ECh. 6.4 - Prob. 8ECh. 6.4 - Solve each equation and check: 34x3=512Ch. 6.4 - Prob. 10ECh. 6.4 - Prob. 11ECh. 6.4 - Solve each equation and check: 2x37=x2Ch. 6.4 - Solve each equation and check: y31=y6Ch. 6.4 - Prob. 14ECh. 6.4 - Solve each equation and check: 3x4720=25xCh. 6.4 - Solve each equation and check: 5x6+13(6+x)=37Ch. 6.4 - Solve each equation and check: x2+23(2x+3)=46Ch. 6.4 - Solve each equation and check: 16x19(2x3)=1Ch. 6.4 - Prob. 19ECh. 6.4 - Prob. 20ECh. 6.4 - Solve each equation and check: 3x24163x1212=3Ch. 6.4 - Prob. 22ECh. 6.4 - Solve each equation and check: 5x+6x814+10x+66=43Ch. 6.4 - Prob. 24ECh. 6.4 - Solve each equation and check: 4x6x+52=6x68Ch. 6.4 - Prob. 26ECh. 6.4 - Prob. 27ECh. 6.4 - Prob. 28ECh. 6.4 - Solve each equation and check: 51x=7Ch. 6.4 - Solve each equation and check: 3x6=8Ch. 6.4 - Prob. 31ECh. 6.4 - Solve each equation and check: 17x=8Ch. 6.4 - Solve each equation and check: 3x8=7Ch. 6.4 - Prob. 34ECh. 6.4 - Prob. 35ECh. 6.4 - Prob. 36ECh. 6.4 - Solve each equation and check: 6x+5=14Ch. 6.4 - Prob. 38ECh. 6.4 - Solve each equation and check: 12x=143x13Ch. 6.4 - Prob. 40ECh. 6.4 - Prob. 41ECh. 6.4 - Solve each equation and check: 8x+14=5x+13Ch. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Prob. 2ECh. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Prob. 4ECh. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Prob. 8ECh. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Prob. 14ECh. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Prob. 19ECh. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Prob. 22ECh. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Translate each phrase or sentence into algebraic...Ch. 6.5 - Prob. 25ECh. 6.6 - A built-in bookcase containing eight book shelves...Ch. 6.6 - Saw a board 8 ft 4 in. long into nine equal...Ch. 6.6 - Separate an order of 256 light fixtures so that...Ch. 6.6 - Distribute $1000 into three parts so that one part...Ch. 6.6 - Distribute $4950 among John, Maria, and Betsy so...Ch. 6.6 - Distribute $4950 among John, Maria, and Betsy so...Ch. 6.6 - A rectangle is twice as long as it is wide. Its...Ch. 6.6 - The length of a rectangle is 4 cm less than twice...Ch. 6.6 - One side of a rectangular yard is bounded by the...Ch. 6.6 - A given type of concrete contains an amount of...Ch. 6.6 - The perimeter of a triangle is 122 ft. The lengths...Ch. 6.6 - Cut a board 20 ft long into three pieces so that...Ch. 6.6 - Cut a 12-ft beam into two pieces so that one piece...Ch. 6.6 - The total cost of three automobile batteries is...Ch. 6.6 - The total cost of 20 boards is $166. One size...Ch. 6.6 - Amy and Kurt earned a total of $512 by working a...Ch. 6.6 - Joyce invests $7500 in two savings accounts. One...Ch. 6.6 - Chuck receives loans totaling $12,000 from two...Ch. 6.6 - Regular milk has 4% butterfat. How many litres of...Ch. 6.6 - How much pure alcohol must be added to 750 mL of a...Ch. 6.6 - Mix a solution that is 30% alcohol with a solution...Ch. 6.6 - Prob. 22ECh. 6.6 - A 12-quart cooling system is checked and found to...Ch. 6.6 - In testing an engine, various mixtures of gasoline...Ch. 6.6 - Assume you have sea water that weighs 64lb/ft3 and...Ch. 6.6 - Prob. 26ECh. 6.6 - Jeff invested $30,000 in a business whereas his...Ch. 6.6 - Prob. 28ECh. 6.6 - Cloth table coverings are to be cut for 8...Ch. 6.6 - How many quarts of water must be added to 3 gal of...Ch. 6.6 - Ground beef that is 90% lean costs 114 times the...Ch. 6.7 - Solve each formula for the given letter: E=IrforrCh. 6.7 - Solve each formula for the given letter: A=bhforbCh. 6.7 - Solve each formula for the given letter: F=maforaCh. 6.7 - Prob. 4ECh. 6.7 - Solve each formula for the given letter: C=dfordCh. 6.7 - Solve each formula for the given letter: V=IRforRCh. 6.7 - Solve each formula for the given letter: V=lwhforwCh. 6.7 - Solve each formula for the given letter:...Ch. 6.7 - Solve each formula for the given letter: A=2rhforhCh. 6.7 - Solve each formula for the given letter: C=2rforrCh. 6.7 - Solve each formula for the given letter:...Ch. 6.7 - Prob. 12ECh. 6.7 - Solve each formula for the given letter: I=QtfortCh. 6.7 - Prob. 14ECh. 6.7 - Prob. 15ECh. 6.7 - Solve each formula for the given letter: I=EZforZCh. 6.7 - Solve each formula for the given letter: I=VRforRCh. 6.7 - Prob. 18ECh. 6.7 - Solve each formula for the given letter:...Ch. 6.7 - Solve each formula for the given letter: R=2PforPCh. 6.7 - Solve each formula for the given letter:...Ch. 6.7 - Prob. 22ECh. 6.7 - Prob. 23ECh. 6.7 - Solve each formula for the given letter:...Ch. 6.7 - Solve each formula for the given letter:...Ch. 6.7 - Prob. 26ECh. 6.7 - Prob. 27ECh. 6.7 - Solve each formula for the given letter:...Ch. 6.7 - Solve each formula for the given letter:...Ch. 6.7 - Prob. 30ECh. 6.7 - Prob. 31ECh. 6.7 - Solve each formula for the given letter:...Ch. 6.7 - Solve each formula for the given letter:...Ch. 6.7 - Prob. 34ECh. 6.7 - Solve each formula for the given letter:...Ch. 6.7 - Solve each formula for the given letter:...Ch. 6.7 - Solve each formula for the given letter:...Ch. 6.7 - Prob. 38ECh. 6.7 - Prob. 39ECh. 6.7 - Solve each formula for the given letter:...Ch. 6.7 - Solve each formula for the given letter:...Ch. 6.7 - Solve each formula for the given letter:...Ch. 6.7 - Solve each formula for the given letter:...Ch. 6.7 - Solve each formula for the given letter:...Ch. 6.8 - a. Solve for the indicated. b. Then substitute the...Ch. 6.8 - Prob. 2ECh. 6.8 - a. Solve for the indicated. b. Then substitute the...Ch. 6.8 - Prob. 4ECh. 6.8 - a. Solve for the indicated. b. Then substitute the...Ch. 6.8 - Prob. 6ECh. 6.8 - Prob. 7ECh. 6.8 - a. Solve for the indicated. b. Then substitute the...Ch. 6.8 - a. Solve for the indicated. b. Then substitute the...Ch. 6.8 - Prob. 10ECh. 6.8 - a. Solve for the indicated. b. Then substitute the...Ch. 6.8 - a. Solve for the indicated. b. Then substitute the...Ch. 6.8 - a. Solve for the indicated. b. Then substitute the...Ch. 6.8 - a. Solve for the indicated. b. Then substitute the...Ch. 6.8 - a. Solve for the indicated. b. Then substitute the...Ch. 6.8 - a. Solve for the indicated. b. Then substitute the...Ch. 6.8 - a. Solve for the indicated. b. Then substitute the...Ch. 6.8 - a. Solve for the indicated. b. Then substitute the...Ch. 6.8 - a. Solve for the indicated. b. Then substitute the...Ch. 6.8 - Prob. 20ECh. 6.8 - Prob. 21ECh. 6.8 - The formula for piston displacement is P=cd2SN,...Ch. 6.8 - The length of a cylinder is given by l=Vcd2, where...Ch. 6.8 - A flashlight bulb is connected to a 1.50-V source....Ch. 6.8 - Prob. 25ECh. 6.8 - The volume of a box is given by V=lwh. Find the...Ch. 6.8 - The volume of a cylinder is given by the formula...Ch. 6.8 - The pressure at the bottom of a lake is found by...Ch. 6.8 - The equivalent resistance R of two resistances...Ch. 6.8 - The R value of insulation is given by the formula...Ch. 6.8 - A steel railroad rail expands and contracts...Ch. 6.8 - The inductive reactance, XL, of a coil is given by...Ch. 6.8 - Prob. 33ECh. 6.8 - Prob. 34ECh. 6.8 - Prob. 35ECh. 6.8 - Prob. 36ECh. 6.9 - Use the formula 1R=1R1+1R2 for Exercise 1-6: Given...Ch. 6.9 - Use the formula 1R=1R1+1R2 for Exercise 1-6: Given...Ch. 6.9 - Use the formula 1R=1R1+1R2 for Exercise 1-6: Given...Ch. 6.9 - Prob. 4ECh. 6.9 - Prob. 5ECh. 6.9 - Prob. 6ECh. 6.9 - Prob. 7ECh. 6.9 - Prob. 8ECh. 6.9 - Use the formula 1f=1s0+1si for Exercises 7-10:...Ch. 6.9 - Use the formula 1f=1s0+1si for Exercises 7-10:...Ch. 6.9 - Prob. 11ECh. 6.9 - Prob. 12ECh. 6.9 - Use the formula 1R=1R1+1R2+1R3 for Exercise 11-16:...Ch. 6.9 - Prob. 14ECh. 6.9 - Prob. 15ECh. 6.9 - Prob. 16ECh. 6.9 - Prob. 17ECh. 6.9 - Use the formula 1C=1C1+1C2+1C3 for Exercise 1-22:...Ch. 6.9 - Prob. 19ECh. 6.9 - Prob. 20ECh. 6.9 - Prob. 21ECh. 6.9 - Prob. 22ECh. 6.9 - Prob. 23ECh. 6.9 - Prob. 24ECh. 6 - Solve each equation and check: 2x+4=7Ch. 6 - Prob. 2RCh. 6 - Prob. 3RCh. 6 - Prob. 4RCh. 6 - Prob. 5RCh. 6 - Prob. 6RCh. 6 - Solve each equation and check: 2x+9=5x15Ch. 6 - Prob. 8RCh. 6 - Prob. 9RCh. 6 - Solve each equation and check: 4x+1=4xCh. 6 - Solve each equation and check: 7(x5)=11Ch. 6 - Prob. 12RCh. 6 - Prob. 13RCh. 6 - Solve each equation and check: 6(x+7)5(x+8)=0Ch. 6 - Prob. 15RCh. 6 - Prob. 16RCh. 6 - Solve each equation and check: 2x3=169Ch. 6 - Prob. 18RCh. 6 - Solve each equation and check: 3x4x15=3+x2Ch. 6 - Prob. 20RCh. 6 - Prob. 21RCh. 6 - The length of rectangle is 6 more than twice its...Ch. 6 - Mix a solution that is 60% acid with a solution...Ch. 6 - Solve each formula for the given letter: F=WgforgCh. 6 - Solve each formula for the given letter: P=WAforACh. 6 - Solve each formula for the given letter:...Ch. 6 - Solve each formula for the given letter:...Ch. 6 - Solve each formula for the given letter:...Ch. 6 - Solve each formula for the given letter:...Ch. 6 - Solve each formula for the given letter:...Ch. 6 - Prob. 31RCh. 6 - Prob. 32RCh. 6 - Prob. 33RCh. 6 - Prob. 34RCh. 6 - Solve each equation: x8=6Ch. 6 - Solve each equation: 4x=60Ch. 6 - Prob. 3TCh. 6 - Prob. 4TCh. 6 - Prob. 5TCh. 6 - Solve each equation: 2(x+10)=3(52x)+5Ch. 6 - Solve each equation: 12(3x6)=3(x2)Ch. 6 - Solve each equation: 8x9=56Ch. 6 - Solve each equation: 3x52=x5x10Ch. 6 - Solve each equation: 8x+6=2Ch. 6 - Solve each equation: x225=2x534Ch. 6 - Distribute $2700 among Jose, Maria, and George so...Ch. 6 - How much pure antifreeze must be added to 20 L of...Ch. 6 - Solve P=2(l+2)forlCh. 6 - Solve CT=C1+C2+C3forC2.Ch. 6 - Solve V=lwhforw.Ch. 6 - Given P=I2R,P=480,andl=5.0,findR.Ch. 6 - Given A=h2(a+b),A=260,h=13,anda=15,findbCh. 6 - Given 1C=1C1+1C2,C=20.0FandC2=30.0F,findC1.Ch. 6 - Given 1R=1R1+1R2+1R3,R1=225,R2=475,andR3=925,findRCh. 6 - Prob. 1CRCh. 6 - Prob. 2CRCh. 6 - Write 3.015104 in decimal form.Ch. 6 - Prob. 4CRCh. 6 - Prob. 5CRCh. 6 - Prob. 6CRCh. 6 - Prob. 7CRCh. 6 - Prob. 8CRCh. 6 - Read the measurement shown on the vernier caliper...Ch. 6 - Prob. 10CRCh. 6 - Prob. 11CRCh. 6 - Prob. 12CRCh. 6 - Prob. 13CRCh. 6 - Prob. 14CRCh. 6 - Prob. 15CRCh. 6 - Prob. 16CRCh. 6 - Simplify: (4x3y)(5x+2y)Ch. 6 - Simplify: 215x2y345x3y5Ch. 6 - Prob. 19CRCh. 6 - Prob. 20CRCh. 6 - Prob. 21CRCh. 6 - Prob. 22CRCh. 6 - Prob. 23CRCh. 6 - Prob. 24CRCh. 6 - Prob. 25CRCh. 6 - Prob. 26CRCh. 6 - Prob. 27CRCh. 6 - Prob. 28CRCh. 6 - Prob. 29CRCh. 6 - The perimeter of a rectangle is 30 ft. The width...
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- 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
- c) Using only Laplace transforms solve the following Samuelson model given below i.e., the second order difference equation (where yt is national income): - Yt+2 6yt+1+5y₁ = 0, if y₁ = 0 for t < 0, and y₁ = 0, y₁ = 1 1-e-s You may use without proof that L-1[s(1-re-s)] = f(t) = r² for n ≤tarrow_forward5. 156 m/WXY = 59° 63 E 7. B E 101 C mFE = 6. 68° 8. C 17arrow_forwardScoring: MATH 15 FILING /10 COMPARISON /10 RULER I 13 Express EMPLOYMENT PROFESSIONALS NAME: SKILLS EVALUATION TEST- Light Industrial MATH-Solve the following problems. (Feel free to use a calculator.) DATE: 1. If you were asked to load 225 boxes onto a truck, and the boxes are crated, with each crate containing nine boxes, how many crates would you need to load? 2. Imagine you live only one mile from work and you decide to walk. If you walk four miles per hour, how long will it take you to walk one mile? 3. Add 3 feet 6 inches + 8 feet 2 inches + 4 inches + 2 feet 5 inches. 4. In a grocery store, steak costs $3.85 per pound. If you buy a three-pound steak and pay for it with a $20 bill, how much change will you get? 5. Add 8 minutes 32 seconds + 37 minutes 18 seconds + 15 seconds. FILING - In the space provided, write the number of the file cabinet where the company should be filed. Example: File Cabinet #4 Elson Co. File Cabinets: 1. Aa-Bb 3. Cg-Dz 5. Ga-Hz 7. La-Md 9. Na-Oz 2. Bc-Cf…arrow_forwardarrow_back_iosSEE MORE QUESTIONSarrow_forward_ios
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