MyLab Math plus Pearson eText -- Standalone Access Card -- for Finite Mathematics & Its Applications (12th Edition)
12th Edition
ISBN: 9780134765723
Author: Larry J. Goldstein, David I. Schneider, Martha J. Siegel, Steven Hair
Publisher: PEARSON
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Textbook Question
Chapter 6.2, Problem 22E
Employees’ Ages The next table summarizes the age distribution for a company’s employees. Each probability is the likelihood that a randomly selected employee is in the specified age group.
a. Convert this data into a probability distribution with outcomes 20–34 years, 35–49 years, 50–64 years, and 65–79 years.
b. What is the probability that an employee selected at random is at least 50 years old?
Age (years) |
Probability |
20-34 |
.15 |
20-49 |
.70 |
20-64 |
.90 |
20-79 |
1 |
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Chapter 6 Solutions
MyLab Math plus Pearson eText -- Standalone Access Card -- for 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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- Question 3. We want to price a put option with strike price K and expiration T. Two financial advisors estimate the parameters with two different statistical methods: they obtain the same return rate μ, the same volatility σ, but the first advisor has interest r₁ and the second advisor has interest rate r2 (r1>r2). They both use a CRR model with the same number of periods to price the option. Which advisor will get the larger price? (Explain your answer.)arrow_forwardQuestion 5. We consider a put option with strike price K and expiration T. This option is priced using a 1-period CRR model. We consider r > 0, and σ > 0 very large. What is the approximate price of the option? In other words, what is the limit of the price of the option as σ∞. (Briefly justify your answer.)arrow_forwardQuestion 6. You collect daily data for the stock of a company Z over the past 4 months (i.e. 80 days) and calculate the log-returns (yk)/(-1. You want to build a CRR model for the evolution of the stock. The expected value and standard deviation of the log-returns are y = 0.06 and Sy 0.1. The money market interest rate is r = 0.04. Determine the risk-neutral probability of the model.arrow_forward
- 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.arrow_forwardWe 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 Soarrow_forwardIn 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…arrow_forward
- In this problem, we consider a 2-period stock market model with evolution given in Fig. 1 below. Each period corresponds to one year (At = 1). The yearly interest rate is r = 1/3 = 33%. This model is a CRR model. 25 15 9 10 6 4 time Figure 1: Stock evolution for Problem 1. (a) Find the values of up and down factors u and d, and the risk-neutral probability q. (b) We consider a European put with strike price K the price of this option at time 0. == 16 and expiration T = 2 years. Find (c) Provide the number of shares of stock that the replicating portfolio contains at each pos- sible position. (d) You find this option available on the market for $2. What do you do? (Short answer.) (e) We consider an American put with strike price K = 16 and expiration T = 2 years. Find the price of this option at time 0 and describe the optimal exercising strategy. (f) We consider an American call with strike price K ○ = 16 and expiration T = 2 years. Find the price of this option at time 0 and describe…arrow_forwardNo chatgpt pls will upvote Alreadyarrow_forwardFind the LaPla se trnsofrom of a) chi-square Distribution. b) Normal Distribution. C) Gamma Distribution. prove that Binomial (n, 2) Poisson (2) *********************arrow_forward
- 2.2, 13.2-13.3) question: 5 point(s) possible ubmit test The accompanying table contains the data for the amounts (in oz) in cans of a certain soda. The cans are labeled to indicate that the contents are 20 oz of soda. Use the sign test and 0.05 significance level to test the claim that cans of this soda are filled so that the median amount is 20 oz. If the median is not 20 oz, are consumers being cheated? Click the icon to view the data. What are the null and alternative hypotheses? OA. Ho: Medi More Info H₁: Medi OC. Ho: Medi H₁: Medi Volume (in ounces) 20.3 20.1 20.4 Find the test stat 20.1 20.5 20.1 20.1 19.9 20.1 Test statistic = 20.2 20.3 20.3 20.1 20.4 20.5 Find the P-value 19.7 20.2 20.4 20.1 20.2 20.2 P-value= (R 19.9 20.1 20.5 20.4 20.1 20.4 Determine the p 20.1 20.3 20.4 20.2 20.3 20.4 Since the P-valu 19.9 20.2 19.9 Print Done 20 oz 20 oz 20 oz 20 oz ce that the consumers are being cheated.arrow_forwardT Teenage obesity (O), and weekly fast-food meals (F), among some selected Mississippi teenagers are: Name Obesity (lbs) # of Fast-foods per week Josh 185 10 Karl 172 8 Terry 168 9 Kamie Andy 204 154 12 6 (a) Compute the variance of Obesity, s²o, and the variance of fast-food meals, s², of this data. [Must show full work]. (b) Compute the Correlation Coefficient between O and F. [Must show full work]. (c) Find the Coefficient of Determination between O and F. [Must show full work]. (d) Obtain the Regression equation of this data. [Must show full work]. (e) Interpret your answers in (b), (c), and (d). (Full explanations required). Edit View Insert Format Tools Tablearrow_forwardH.w WI M Wz dy A Sindax Sind ①dlmax У тах at 0.75m from A W=6KN/M L=2 W2 = 9 KN/m P= 10 KN Barrow_forward
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