
Finite Mathematics & Its Applications (12th Edition)
12th Edition
ISBN: 9780134437767
Author: Larry J. Goldstein, David I. Schneider, Martha J. Siegel, Steven Hair
Publisher: PEARSON
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Chapter 6, Problem 34RE
To determine
To calculate: The probability of obtaining the following sequence of colors red, green, green, red if an urn contains
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Chapter 6 Solutions
Finite Mathematics & Its Applications (12th Edition)
Ch. 6.1 - 1. Lightbulbs A machine produces lightbulbs. As...Ch. 6.1 - 2. Citrus Fruit Suppose that there are two crates...Ch. 6.1 - 1. Committee Selection A committee of two people...Ch. 6.1 - 2. Selecting Letters A letter is selected at...Ch. 6.1 - Heads and Tails An experiment consists of tossing...Ch. 6.1 - Four-Sided Dice A pair of four-sided dice-each...Ch. 6.1 - 5. Selecting from Urns Suppose that we have two...Ch. 6.1 - Coin Tosses An experiment consists of tossing a...Ch. 6.1 - 7. Efficiency Studies An efficiency expert records...Ch. 6.1 - Census Data A census taker records the annual...
Ch. 6.1 - Student Poll A campus survey is taken to correlate...Ch. 6.1 - 10. Automobiles An experiment consists of...Ch. 6.1 - 11. Let be a sample space,
.
a. Are E and F...Ch. 6.1 - 12. Draw the events E and E′ on two separate Venn...Ch. 6.1 - 13. Let be a sample space. Determine all possible...Ch. 6.1 - 14. Let S be a sample space with n outcomes. How...Ch. 6.1 - Let S={1,2,3,4} be a sample space, E={1}, and...Ch. 6.1 - 16. Let S be any sample space, and E, F any events...Ch. 6.1 - Coin Tosses Suppose that 10 coins are tossed and...Ch. 6.1 - Three-Digit Numbers An experiment consists of...Ch. 6.1 - Genetic Traits An experiment consists of observing...Ch. 6.1 - 20. Genetic Traits Consider the experiment and...Ch. 6.1 - 21. Shuttle Bus Suppose that you observe the...Ch. 6.1 - 22. Dice A pair of dice is rolled, and the sum of...Ch. 6.1 - Selecting Balls from an Urn An urn contains balls...Ch. 6.1 - Selecting Balls from an Urn Repeat Exercise 23 in...Ch. 6.1 - 25. NBA Draft Lottery In the NBA, the 14...Ch. 6.1 - Coin Die Suppose that a coin is tossed and a die...Ch. 6.1 - 27. The Game of Clue Clue is a board game in which...Ch. 6.2 - Solutions can be found following the section...Ch. 6.2 - Solutions can be found following the section...Ch. 6.2 - Prob. 3CYUCh. 6.2 - In Exercises 1–4, classify the type of probability...Ch. 6.2 - Prob. 2ECh. 6.2 - Prob. 3ECh. 6.2 - In Exercises 1–4, classify the type of probability...Ch. 6.2 - In Exercises 5 and 6, determine the probability...Ch. 6.2 - In Exercises 5 and 6, determine the probability...Ch. 6.2 - 7. Roulette The modern American roulette wheel has...Ch. 6.2 - U.S. States A state is selected at random from the...Ch. 6.2 - 9. Word Frequencies There are 4487 words in the...Ch. 6.2 - 10. United Nations Of the 193 member countries of...Ch. 6.2 - 11. Selecting a Letter An experiment consists of...Ch. 6.2 - 12. Selecting a Number An experiment consists of...Ch. 6.2 - Dice Suppose that a red die and a green die are...Ch. 6.2 - Children An experiment consists of observing the...Ch. 6.2 - Kind of High School The given table shows the...Ch. 6.2 - Highest Degree Planned The next table shows the...Ch. 6.2 - Grade Distributions The following table shows the...Ch. 6.2 - 18. Candy Colors The colors in a bag of...Ch. 6.2 - Prob. 19ECh. 6.2 - 20. An experiment with outcomes has the following...Ch. 6.2 - College Applications The table that follows was...Ch. 6.2 - 22. Employees’ Ages The next table summarizes the...Ch. 6.2 - 23. Which of the following probabilities are...Ch. 6.2 - 24. Which of the following probabilities are...Ch. 6.2 - Car Race Three cars, a Mazda, a Honda, and a Ford,...Ch. 6.2 - 26. Hair Color In a study, the residents of...Ch. 6.2 - 27. Political Views On a certain campus, the...Ch. 6.2 - 28. Tennis The probability that Alice beats Ben in...Ch. 6.2 - 29. Pair of Dice Suppose that a pair of dice is...Ch. 6.2 - Coin Tossing An experiment consists of tossing a...Ch. 6.2 - 31. Suppose that where E and F are mutually...Ch. 6.2 - Suppose that Pr(E)=.3andPr(EF)=.7, where E and F...Ch. 6.2 - In Exercises 33–36, consider the probabilities...Ch. 6.2 - In Exercises 3336, consider the probabilities...Ch. 6.2 - In Exercises 3336, consider the probabilities...Ch. 6.2 - In Exercises 3336, consider the probabilities...Ch. 6.2 - In Exercises 37–40, use a Venn diagram similar to...Ch. 6.2 - In Exercises 3740, use a Venn diagram similar to...Ch. 6.2 - In Exercises 3740, use a Venn diagram similar to...Ch. 6.2 - In Exercises 3740, use a Venn diagram similar to...Ch. 6.2 - 41. Convert the odds of “10 to 1” to a...Ch. 6.2 - Convert the odds of 4 to 5 to a probability.Ch. 6.2 - Convert the probability .2 to odds.Ch. 6.2 - Convert the probability 37 to odds.Ch. 6.2 - Coin Tosses The probability of getting three heads...Ch. 6.2 - Advanced Degree The probability that a graduate of...Ch. 6.2 - 47. Demographic The odds of a person in the...Ch. 6.2 - 48. Election Odds In March 2016, a betting website...Ch. 6.2 - Bookies Gamblers usually give odds against an...Ch. 6.2 - 50. Odds of an Earthquake The probability that...Ch. 6.2 - Prob. 51ECh. 6.2 - Prob. 52ECh. 6.3 - Solutions can be found following the section...Ch. 6.3 - Prob. 2CYUCh. 6.3 - 1. A number is chosen at random from the whole...Ch. 6.3 - 2. A number is chosen at random from the whole...Ch. 6.3 - 3. Balls in an Urn An urn contains five red balls...Ch. 6.3 - 4. Balls in an Urn An urn contains seven green...Ch. 6.3 - Balls in an Urn An urn contains six green balls...Ch. 6.3 - 6. Balls in an Urn An urn contains eight red balls...Ch. 6.3 - 7. Opinion Polling Two out of the seven members of...Ch. 6.3 - Opinion Polling Of the 15 members on a Senate...Ch. 6.3 - 9. Committee Selection In the 114th United States...Ch. 6.3 - 10. Committee Selection The U.S. Senate consists...Ch. 6.3 - 11. Quality Control A factory produces LCD panels,...Ch. 6.3 - Rotten Tomato A bag contains nine tomatoes, of...Ch. 6.3 - Selecting Students Exercises 13–16 refer to a...Ch. 6.3 - Selecting Students Exercises 1316 refer to a...Ch. 6.3 - Selecting Students Exercises 13–16 refer to a...Ch. 6.3 - Selecting Students Exercises 13–16 refer to a...Ch. 6.3 - 17. Birthday Three people are chosen at random....Ch. 6.3 - Birthday Four people are chosen at random. What is...Ch. 6.3 - 19. Date Conflict Without consultation with each...Ch. 6.3 - 20. Presidential Choices There were 16 presidents...Ch. 6.3 - Name Badges Eight workers need an employee number...Ch. 6.3 - Random Selection Each person in a group of 10...Ch. 6.3 - Birthday Problem What is the probability that, in...Ch. 6.3 - Birthday Problem Johnny Carson, host of The...Ch. 6.3 - Dice A die is rolled twice. What is the...Ch. 6.3 - Dice A die is rolled three times. What is the...Ch. 6.3 - Dice A die is rolled four times. What is the...Ch. 6.3 - Dice A die is rolled three times. What is the...Ch. 6.3 - 29. Coin Tosses A coin is tossed 10 times. What is...Ch. 6.3 - Coin Tosses A coin is tossed seven times. What is...Ch. 6.3 - Prob. 31ECh. 6.3 - 32. Elevator An elevator has six buttons: L, 1, 2,...Ch. 6.3 - Street Routs Figure 1 shows a partial map of the...Ch. 6.3 - Street Routes Repeat Exercise 33 for Fig. 2.Ch. 6.3 - 35. Baseball Predictions In the American League,...Ch. 6.3 - Baseball Predictions Suppose that the sportswriter...Ch. 6.3 - 37. Baseball Predictions Suppose that the...Ch. 6.3 - Baseball Predictions Suppose that the sportswriter...Ch. 6.3 - Place Settings Fred has five place settings...Ch. 6.3 - 40. Track Positions Michael and Christopher are...Ch. 6.3 - 41. Group Picture A man, a woman, and their three...Ch. 6.3 - 42. Letter Positions What is the probability that...Ch. 6.3 - Poker A poker hand consists of five cards drawn...Ch. 6.3 - Poker A poker hand consists of five cards drawn...Ch. 6.3 - Poker A poker hand consists of five cards drawn...Ch. 6.3 - Prob. 46ECh. 6.3 - Prob. 47ECh. 6.3 - Powerball Lottery The winner of the Powerball...Ch. 6.3 - Illinois Lotto Exercises 49 and 50 refer to the...Ch. 6.3 - Illinois Lotto Exercises 49 and 50 refer to the...Ch. 6.3 - 51. California Lottery In the California Fantasy 5...Ch. 6.3 - Prob. 52ECh. 6.3 - Prob. 53ECh. 6.3 - Prob. 54ECh. 6.3 - 55. Health Statistics Table 2 shows the...Ch. 6.3 - Prob. 56ECh. 6.3 - Prob. 57ECh. 6.3 - Prob. 58ECh. 6.3 - License Plate Game Johnny and Doyle are driving on...Ch. 6.3 - Prob. 60ECh. 6.3 - Prob. 61ECh. 6.3 - 62. Term Papers A political science class has 20...Ch. 6.3 - Prob. 63ECh. 6.3 - Prob. 64ECh. 6.3 - Prob. 65ECh. 6.3 - Prob. 66ECh. 6.4 - 1. Cards Suppose that there are three cards: one...Ch. 6.4 - Show that if events E and F are independent of...Ch. 6.4 - 1. The Venn diagram in Fig. 3 shows the...Ch. 6.4 - 2. The Venn diagram in Fig. 4 shows the...Ch. 6.4 - Let S be a sample space and E and F be events...Ch. 6.4 - Let S be a sample space and E and F be events...Ch. 6.4 - Let S be a sample space and E and F be events...Ch. 6.4 - 6. Let S be a sample space and E and F be events...Ch. 6.4 - Let S be a sample space and E and F be events...Ch. 6.4 - Let S be a sample space and E and F be events...Ch. 6.4 - Dice When a pair of dice is rolled, what is the...Ch. 6.4 - 10. Dice When a pair of dice is rolled, what is...Ch. 6.4 - Coins A coin is tossed three times. What is the...Ch. 6.4 - Coins A coin is tossed three times. What is the...Ch. 6.4 - Bag of Marbles A bag contains five red marbles and...Ch. 6.4 - Balls in an Urn Two balls are selected at random...Ch. 6.4 - 15. Children Suppose a family has two children and...Ch. 6.4 - Children Suppose a family has two children and at...Ch. 6.4 - 17. Value of College Twenty-five percent of...Ch. 6.4 - Advanced Degrees Sixty percent of the teachers at...Ch. 6.4 - Advanced Degrees Table 1 shows the projected...Ch. 6.4 - 20. Voting Table 2 shows the number of registered...Ch. 6.4 - Military Personnel Table 3 shows the numbers (in...Ch. 6.4 - 22. College Majors Table 4 shows the probable...Ch. 6.4 - 23. Bills in Envelopes Each of three sealed opaque...Ch. 6.4 - 24. Gold and Silver Coins Consider three boxes....Ch. 6.4 - 25. Cards A sequence of two playing cards is drawn...Ch. 6.4 - Cards A sequence of two playing cards is drawn at...Ch. 6.4 - Coin Tosses A coin is tossed five times. What is...Ch. 6.4 - Coin Tosses A coin is tossed twice. What is the...Ch. 6.4 - 29. Exit Polling According to exit polling for the...Ch. 6.4 - Population Twenty percent of the worlds population...Ch. 6.4 - 31. Basketball Suppose that your team is behind by...Ch. 6.4 - 32. Password Fred remembers all but the last...Ch. 6.4 - Let E and F be events with P(E)=.4,Pr(F)=.5, and...Ch. 6.4 - 34. Let E and F be events with , and. Are E and F...Ch. 6.4 - 35. Let E and F be independent events with . Find...Ch. 6.4 - 36. Let E and F be independent events with and ....Ch. 6.4 - In Exercises 3740, assume that E and F are...Ch. 6.4 - In Exercises 3740, assume that E and F are...Ch. 6.4 - In Exercises 37–40, assume that E and F are...Ch. 6.4 - In Exercises 3740, assume that E and F are...Ch. 6.4 - Let A, B, and C be independent events with...Ch. 6.4 - 42. Let A, B, and C be independent events with , ...Ch. 6.4 - 43. Balls in an Urn A sample of two balls is drawn...Ch. 6.4 - Balls in an Urn An urn contains two white balls...Ch. 6.4 - 45. Roll a Die Roll a die, and consider the...Ch. 6.4 - Roll a Die Roll a die, and consider the following...Ch. 6.4 - Rolling Dice Roll a pair of dice, and consider the...Ch. 6.4 - Rolling Dice Roll a pair of dice, and consider the...Ch. 6.4 - 49. Epidemiology A doctor studies the known cancer...Ch. 6.4 - 50. Blood Tests A hospital uses two tests to...Ch. 6.4 - Medical Screening A medical screening program...Ch. 6.4 - Guessing on an Exam A truefalse exam has 10...Ch. 6.4 - 53. System Reliability A TV set contains five...Ch. 6.4 - System Reliability In November 2015, Intel...Ch. 6.4 - 55. Smartphones Suppose that in Sleepy Valley, 70%...Ch. 6.4 - 56. Fishing The probability that a fisherman...Ch. 6.4 - Baseball A baseball players batting average...Ch. 6.4 - Roulette If you bet on the number 7 in roulette,...Ch. 6.4 - Free-Throws A basketball player makes each...Ch. 6.4 - 60. Free-Throws Rework Exercise 59 with a...Ch. 6.4 - Free-Throws Consider Exercise 59, but let the...Ch. 6.4 - Free-Throws Consider Exercise 59, but let the...Ch. 6.4 - Prob. 63ECh. 6.4 - 64. Coin Toss A coin is tossed five times. Is the...Ch. 6.4 - Prob. 65ECh. 6.4 - Prob. 66ECh. 6.4 - Prob. 67ECh. 6.4 - 68. Use the inclusion–exclusion principle for...Ch. 6.5 - Solutions can be found following the section...Ch. 6.5 - Solutions can be found following the section...Ch. 6.5 - Solutions can be found following the section...Ch. 6.5 - Solutions can be found following the section...Ch. 6.5 - In Exercises 1–4, draw trees representing the...Ch. 6.5 - In Exercises 1–4, draw trees representing the...Ch. 6.5 - Prob. 3ECh. 6.5 - In Exercises 1–4, draw trees representing the...Ch. 6.5 - Personnel Categories Refer to Exercise 3. What is...Ch. 6.5 - 6. Tax Returns Refer to Exercise 4. What is the...Ch. 6.5 - Personnel Categories Refer to Exercise 3. What is...Ch. 6.5 - Personnel Categories Refer to Exercise 3. What is...Ch. 6.5 - 9. Selecting from Urns Suppose that there is a...Ch. 6.5 - Cards, Coins, Dice A card is drawn from a 52-card...Ch. 6.5 - 11. Cards A card is drawn from a 52-card deck. We...Ch. 6.5 - 12. Balls in an Urn An urn contains six white...Ch. 6.5 - Quality Control Twenty percent of the library...Ch. 6.5 - Water Testing In a recent environmental study of...Ch. 6.5 - 15. Color Blindness Color blindness is a...Ch. 6.5 - Manufacturing A factory has two machines that...Ch. 6.5 - 17. T-maze A mouse is put into a T-maze (a maze...Ch. 6.5 - 18. T-maze Refer to Exercise 17. What is the...Ch. 6.5 - 19. Heads or Tails Three ordinary quarters and a...Ch. 6.5 - Prob. 20ECh. 6.5 - Tennis Kim has a strong first serve; whenever it...Ch. 6.5 - Tennis When a tennis player hits his first serve...Ch. 6.5 - 23. Accidental Nuclear War Suppose that, during...Ch. 6.5 - 24. Accidental Nuclear War Refer to Exercise 23....Ch. 6.5 - Coin Tosses A coin is to be tossed at most five...Ch. 6.5 - Cards Suppose that, instead of tossing a coin, the...Ch. 6.5 - Genetics Traits passed from generation to...Ch. 6.5 - 28. Genetics Refer to Exercise 27. Suppose that a...Ch. 6.5 - College Faculty At a local college, five sections...Ch. 6.5 - Quality Control A lightbulb manufacturer knows...Ch. 6.5 - 31. Balls in an Urn Urn I contains 5 red balls and...Ch. 6.5 - 32. Balls in an Urn An urn contains five red balls...Ch. 6.5 - Prob. 33ECh. 6.5 - 34. Selecting from Urns An urn contains four red...Ch. 6.5 - Industrial Production A factory that produces...Ch. 6.5 - Golf Bud is a very consistent golfer. On par-three...Ch. 6.5 - Nontransitive Dice Consider three dice: one red,...Ch. 6.5 - U.S. Car Production Car production in North...Ch. 6.5 - Prob. 39ECh. 6.5 - Prob. 40ECh. 6.5 - Prob. 41ECh. 6.5 - Prob. 42ECh. 6.5 - Prob. 43ECh. 6.5 - Prob. 44ECh. 6.5 - Medical Screening Suppose that a test for...Ch. 6.5 - Medical Screening The probability .0002 (or .02%)...Ch. 6.5 - 47. Medical Screening The results of a trial used...Ch. 6.5 - 48. Medical Screening The results of a trial used...Ch. 6.5 - Drug Testing Suppose that 500 athletes are tested...Ch. 6.5 - Polygraph Test Recent studies have indicated that...Ch. 6.6 - 1. Quality Control Refer to Example 2. Suppose...Ch. 6.6 - 2. Political Polling Use the method of natural...Ch. 6.6 - In Exercises 122, use Bayes theorem to calculate...Ch. 6.6 - In Exercises 122, use Bayes theorem to calculate...Ch. 6.6 - In Exercises 1–22, use Bayes’ theorem to calculate...Ch. 6.6 - In Exercises 1–22, use Bayes’ theorem to calculate...Ch. 6.6 - In Exercises 122, use Bayes theorem to calculate...Ch. 6.6 - In Exercises 1–22, use Bayes’ theorem to calculate...Ch. 6.6 - In Exercises 122, use Bayes theorem to calculate...Ch. 6.6 - In Exercises 1–22, use Bayes’ theorem to calculate...Ch. 6.6 - In Exercises 122, use Bayes theorem to calculate...Ch. 6.6 - In Exercises 122, use Bayes theorem to calculate...Ch. 6.6 - Exercises 11–15 refer to diagnostic tests. A false...Ch. 6.6 - Exercises 11–15 refer to diagnostic tests. A false...Ch. 6.6 - Exercises 11–15 refer to diagnostic tests. A false...Ch. 6.6 - Exercises 11–15 refer to diagnostic tests. A false...Ch. 6.6 - Exercises 11–15 refer to diagnostic tests. A false...Ch. 6.6 - In Exercises 122, use Bayes theorem to calculate...Ch. 6.6 - In Exercises 122, use Bayes theorem to calculate...Ch. 6.6 - In Exercises 1–22, use Bayes’ theorem to calculate...Ch. 6.6 - Prob. 19ECh. 6.6 - In Exercises 1–22, use Bayes’ theorem to calculate...Ch. 6.6 - In Exercises 122, use Bayes theorem to calculate...Ch. 6.6 - In Exercises 122, use Bayes theorem to calculate...Ch. 6.6 - In Exercises 2330, use the method of natural...Ch. 6.6 - In Exercises 23–30, use the method of natural...Ch. 6.6 - Prob. 25ECh. 6.6 - Prob. 26ECh. 6.6 - In Exercises 23–30, use the method of natural...Ch. 6.6 - In Exercises 2330, use the method of natural...Ch. 6.6 - Prob. 29ECh. 6.6 - In Exercises 2330, use the method of natural...Ch. 6.7 - 1. Rolling a Die Simulate 36 rolls of a fair die....Ch. 6.7 - Prob. 2ECh. 6.7 - Free-Throws Simulate 10 free-throws for Kobe...Ch. 6.7 - Prob. 4ECh. 6.7 - Prob. 5ECh. 6.7 - Prob. 6ECh. 6.7 - Prob. 7ECh. 6.7 - Prob. 8ECh. 6.7 - 9. Gas Queue A gas station with four self-serve...Ch. 6.7 - Prob. 10ECh. 6 - 1. What is the sample space of an experiment?
Ch. 6 - 2. Using the language of sets and assuming that A...Ch. 6 - In a sample space, what is the probability of the...Ch. 6 - 4. What subset in a sample space corresponds to...Ch. 6 - Prob. 5FCCECh. 6 - Prob. 6FCCECh. 6 - Prob. 7FCCECh. 6 - Prob. 8FCCECh. 6 - Prob. 9FCCECh. 6 - Prob. 10FCCECh. 6 - Prob. 11FCCECh. 6 - Prob. 12FCCECh. 6 - Prob. 13FCCECh. 6 - Coins A box contains a penny, a nickel, a dime, a...Ch. 6 - Prob. 2RECh. 6 - 3. Suppose that E and F are events with . Find .
Ch. 6 - Suppose that E and F are mutually exclusive events...Ch. 6 - 5. Languages Of the 120 students in a class, 30...Ch. 6 - Prob. 6RECh. 6 - Prob. 7RECh. 6 - Prob. 8RECh. 6 - 9. Demographics Twenty-six percent of all...Ch. 6 - Prob. 10RECh. 6 - Prob. 11RECh. 6 - Prob. 12RECh. 6 - 13. Barrel of Apples Five of the apples in a...Ch. 6 - 14. Opinion Sampling Of the nine city council...Ch. 6 - Exam Questions Prior to taking an essay...Ch. 6 - 16. Craps In the casino game of craps, a player...Ch. 6 - Coin Tosses A coin is to be tossed five times....Ch. 6 - Coin Tosses Two players each toss a coin three...Ch. 6 - Olympic Swimmers In an Olympic swimming event, two...Ch. 6 - Prob. 20RECh. 6 - Prob. 21RECh. 6 - Drawing Cards A card is drawn at random from a...Ch. 6 - 23. Dice What is the probability of having each of...Ch. 6 - 24. Dice Find the odds in favor of getting four...Ch. 6 - Birthdays What is the probability that, out of a...Ch. 6 - Birthdays Four people are chosen at random. What...Ch. 6 - Let E and F be events with Pr(E)=.4,Pr(F)=.3, and...Ch. 6 - 28. Let E and F be events with . Find .
Ch. 6 - Coin Tosses When a coin is tossed three times,...Ch. 6 - 30. Dice Suppose that a pair of dice is rolled....Ch. 6 - Prob. 31RECh. 6 - Prob. 32RECh. 6 - 33. Premed Majors Suppose that a certain college...Ch. 6 - Prob. 34RECh. 6 - Prob. 35RECh. 6 - Coin Tosses Suppose that we toss a coin three...Ch. 6 - Prob. 37RECh. 6 - Prob. 38RECh. 6 - 39. Archery Two archers shoot at a moving target....Ch. 6 - 40. Final Exam Fred will do well on his final exam...Ch. 6 - Let A and B be independent events for which the...Ch. 6 - Let A and B be independent events with Pr(A)=.3...Ch. 6 - Prob. 43RECh. 6 - Prob. 44RECh. 6 - Prob. 45RECh. 6 - Prob. 46RECh. 6 - Left-Handedness According to a geneticist at...Ch. 6 - Tax Audits An auditing procedure for income tax...Ch. 6 - 49. Weighing Produce A supermarket has three...Ch. 6 - 50. Dragons An island contains an equal number of...Ch. 6 - Prob. 51RECh. 6 - Prob. 52RECh. 6 - Prob. 53RECh. 6 - Prob. 54RECh. 6 - Prob. 55RECh. 6 - Prob. 56RECh. 6 - First Paradox: Under certain circumstances, you...Ch. 6 - First Paradox: Under certain circumstances, you...Ch. 6 - First Paradox: Under certain circumstances, you...Ch. 6 - Prob. 4PCh. 6 - First Paradox: Under certain circumstances, you...Ch. 6 - Second Paradox: The probability of a male...Ch. 6 - Prob. 7PCh. 6 - Prob. 8PCh. 6 - Prob. 9PCh. 6 - Prob. 10PCh. 6 - Prob. 11P
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- Construct a know-show table for each statement below that appears to be true.arrow_forwardProblem 3. Pricing a multi-stock option the Margrabe formula The purpose of this problem is to price a swap option in a 2-stock model, similarly as what we did in the example in the lectures. We consider a two-dimensional Brownian motion given by W₁ = (W(¹), W(2)) on a probability space (Q, F,P). Two stock prices are modeled by the following equations: dX = dY₁ = X₁ (rdt+ rdt+0₁dW!) (²)), Y₁ (rdt+dW+0zdW!"), with Xo xo and Yo =yo. This corresponds to the multi-stock model studied in class, but with notation (X+, Y₁) instead of (S(1), S(2)). Given the model above, the measure P is already the risk-neutral measure (Both stocks have rate of return r). We write σ = 0₁+0%. We consider a swap option, which gives you the right, at time T, to exchange one share of X for one share of Y. That is, the option has payoff F=(Yr-XT). (a) We first assume that r = 0 (for questions (a)-(f)). Write an explicit expression for the process Xt. Reminder before proceeding to question (b): Girsanov's theorem…arrow_forwardProblem 1. Multi-stock model We consider a 2-stock model similar to the one studied in class. Namely, we consider = S(1) S(2) = S(¹) exp (σ1B(1) + (M1 - 0/1 ) S(²) exp (02B(2) + (H₂- M2 where (B(¹) ) +20 and (B(2) ) +≥o are two Brownian motions, with t≥0 Cov (B(¹), B(2)) = p min{t, s}. " The purpose of this problem is to prove that there indeed exists a 2-dimensional Brownian motion (W+)+20 (W(1), W(2))+20 such that = S(1) S(2) = = S(¹) exp (011W(¹) + (μ₁ - 01/1) t) 롱) S(²) exp (021W (1) + 022W(2) + (112 - 03/01/12) t). where σ11, 21, 22 are constants to be determined (as functions of σ1, σ2, p). Hint: The constants will follow the formulas developed in the lectures. (a) To show existence of (Ŵ+), first write the expression for both W. (¹) and W (2) functions of (B(1), B(²)). as (b) Using the formulas obtained in (a), show that the process (WA) is actually a 2- dimensional standard Brownian motion (i.e. show that each component is normal, with mean 0, variance t, and that their…arrow_forward
- Roedel Electronics produces tablet computer accessories, including integrated keyboard tablet stands that connect a keyboard to a tablet device and holds the device at a preferred angle for easy viewing and typing. Roedel produces two sizes of integrated keyboard tablet stands, small and large. Each size uses the same keyboard attachment, but the stand consists of two different pieces, a top flap and a vertical stand that differ by size. Thus, a completed integrated keyboard tablet stand consists of three subassemblies that are manufactured by Roedel: a keyboard, a top flap, and a vertical stand. Roedel's sales forecast indicates that 7,000 small integrated keyboard tablet stands and 5,000 large integrated keyboard tablet stands will be needed to satisfy demand during the upcoming Christmas season. Because only 500 hours of in-house manufacturing time are available, Roedel is considering purchasing some, or all, of the subassemblies from outside suppliers. If Roedel manufactures a…arrow_forwardShow three different pairs of integers, a and b, where at least one example includes a negative integer. For each of your examples, determine if each of the following statements are true or falsearrow_forwardThe scores of 8 students on the midterm exam and final exam were as follows. Student Midterm Final Anderson 98 89 Bailey 88 74 Cruz 87 97 DeSana 85 79 Erickson 85 94 Francis 83 71 Gray 74 98 Harris 70 91 Find the value of the (Spearman's) rank correlation coefficient test statistic that would be used to test the claim of no correlation between midterm score and final exam score. Round your answer to 3 places after the decimal point, if necessary. Test statistic: rs =arrow_forward
- (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 rvices model are equally likely to occur. Hint: Modify model (8.10)-(8.19). Define a variable d, for each scenario and let d₂ > R - R¸ with d ≥ 0. Then make the objective function: Min 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 SG = proportion of portfolio invested in the small-cap growth fund SV = proportion of portfolio invested in the small-cap value fund R = the expected return of the portfolio R = the return of the portfolio in years. Min s.t. R₁ R₂ = R₁ R R5 = FS + IB + LG + LV + SG + SV = R₂ R d₁ =R- d₂z R- d₂ ZR- d₁R- d≥R- R = FS, IB, LG, LV, SG, SV…arrow_forwardThe Martin-Beck Company operates a plant in St. Louis with an annual capacity of 30,000 units. Product is shipped to regional distribution centers located in Boston, Atlanta, and Houston. Because of an anticipated increase in demand, Martin-Beck plans to increase capacity by constructing a new plant in one or more of the following cities: Detroit, Toledo, Denver, or Kansas. The following is a linear program used to determine which cities Martin-Beck should construct a plant in. Let y₁ = 1 if a plant is constructed in Detroit; 0 if not y₂ = 1 if a plant is constructed in Toledo; 0 if not y₂ = 1 if a plant is constructed in Denver; 0 if not y = 1 if a plant is constructed in Kansas City; 0 if not. The variables representing the amount shipped from each plant site to each distribution center are defined just as for a transportation problem. *,, = the units shipped in thousands from plant i to distribution center j i = 1 (Detroit), 2 (Toledo), 3 (Denver), 4 (Kansas City), 5 (St.Louis) and…arrow_forwardConsider the following mixed-integer linear program. Max 3x1 + 4x2 s.t. 4x1 + 7x2 ≤ 28 8x1 + 5x2 ≤ 40 x1, x2 ≥ and x1 integer (a) Graph the constraints for this problem. Indicate on your graph all feasible mixed-integer solutions. On the coordinate plane the horizontal axis is labeled x1 and the vertical axis is labeled x2. A region bounded by a series of connected line segments, and several horizontal lines are on the graph. The series of line segments connect the approximate points (0, 4), (3.889, 1.778), and (5, 0). The region is above the horizontal axis, to the right of the vertical axis, and below the line segments. At each integer value between 0 and 4 on the vertical axis, a horizontal line extends out from the vertical axis to the series of connect line segments. On the coordinate plane the horizontal axis is labeled x1 and the vertical axis is labeled x2. A region bounded by a series of connected line segments, and several…arrow_forward
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