Elementary Statistics (13th Edition)
13th Edition
ISBN: 9780134462455
Author: Mario F. Triola
Publisher: PEARSON
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Textbook Question
Chapter 8.1, Problem 28BSC
Final Conclusions. In Exercises 25–28, use a significance level of α = 0.05 and use the given information for the following:
a. State a conclusion about the null hypothesis. (Reject H0 or fail to reject H0.)
b. Without using technical terms or symbols, state a Final conclusion that addresses the original claim.
28. Original claim: The standard deviation of pulse rates of adult males is more than 11 bpm. The hypothesis test results in a P-value of 0.3045.
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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 8 Solutions
Elementary Statistics (13th Edition)
Ch. 8.1 - Vitamin C and Aspirin A bottle contains a label...Ch. 8.1 - Estimates and Hypothesis Tests Data Set 3 Body...Ch. 8.1 - Mean Height of Men A formal hypothesis test is to...Ch. 8.1 - Interpreting P-value The Ericsson method is one of...Ch. 8.1 - Identifying H0 and H1. In Exercises 58, do the...Ch. 8.1 - Identifying H0 and H1. In Exercises 58, do the...Ch. 8.1 - Identifying H0 and H1. In Exercises 58, do the...Ch. 8.1 - Identifying H0 and H1. In Exercises 58, do the...Ch. 8.1 - Conclusions. In Exercises 912, refer to the...Ch. 8.1 - Conclusions. In Exercises 912, refer to the...
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In Exercises 2528, use a...Ch. 8.1 - Final Conclusions. In Exercises 2528, use a...Ch. 8.1 - Type I and Type II Errors. In Exercises 2932,...Ch. 8.1 - Type I and Type II Errors. In Exercises 2932,...Ch. 8.1 - Type I and Type II Errors. In Exercises 2932,...Ch. 8.1 - Type I and Type II Errors. In Exercises 2932,...Ch. 8.1 - Interpreting Power Chantix (varenicline) tablets...Ch. 8.1 - Calculating Power Consider a hypothesis test of...Ch. 8.1 - Finding Sample Size to Achieve Power Researchers...Ch. 8.2 - In Exercises 14, use these results from a USA...Ch. 8.2 - In Exercises 14, use these results from a USA...Ch. 8.2 - Prob. 3BSCCh. 8.2 - In Exercises 14, use these results from a USA...Ch. 8.2 - Using Technology. In Exercises 58, identify the...Ch. 8.2 - Using Technology. In Exercises 58, identify the...Ch. 8.2 - Using Technology. In Exercises 58, identify the...Ch. 8.2 - Using Technology. In Exercises 58, identify the...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Testing Claims About Proportions. In Exercises...Ch. 8.2 - Exact Method For each of the three different...Ch. 8.2 - Using Confidence Intervals to Test Hypotheses When...Ch. 8.2 - Power For a hypothesis test with a specified...Ch. 8.3 - Video Games: Checking Requirements Twelve...Ch. 8.3 - df If we are using the sample data from Exercise 1...Ch. 8.3 - t Test Exercise 2 refers to a t test. What is a t...Ch. 8.3 - Confidence Interval Assume that we will use the...Ch. 8.3 - Finding P-values. In Exercises 5-8, either use...Ch. 8.3 - Finding P-values. In Exercises 5-8, either use...Ch. 8.3 - Finding P-values. In Exercises 5-8, either use...Ch. 8.3 - Finding P-values. In Exercises 5-8, either use...Ch. 8.3 - Technology. In Exercises 9-12, test the given...Ch. 8.3 - Technology. In Exercises 9-12, test the given...Ch. 8.3 - Technology. In Exercises 9-12, test the given...Ch. 8.3 - Technology. In Exercises 9-12, test the given...Ch. 8.3 - Testing Hypotheses. In Exercises 13-24, assume...Ch. 8.3 - Testing Hypotheses. In Exercises 13-24, assume...Ch. 8.3 - Testing Hypotheses. In Exercises 13-24, assume...Ch. 8.3 - Testing Hypotheses. In Exercises 13-24, assume...Ch. 8.3 - Testing Hypotheses. In Exercises 13-24, assume...Ch. 8.3 - Testing Hypotheses. In Exercises 13-24, assume...Ch. 8.3 - Testing Hypotheses. In Exercises 13-24, assume...Ch. 8.3 - Testing Hypotheses. In Exercises 13-24, assume...Ch. 8.3 - Testing Hypotheses. In Exercises 13-24, assume...Ch. 8.3 - Testing Hypotheses. In Exercises 13-24, assume...Ch. 8.3 - Testing Hypotheses. 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In Exercises 17...Ch. 8.4 - Finding Critical Values of 2 For large numbers of...Ch. 8.4 - Finding Critical Values of 2 Repeat Exercise 19...Ch. 8 - Distributions Using the methods of this chapter,...Ch. 8 - Tails Determine whether the given claim involves a...Ch. 8 - Instagram Poll In a Pew Research Center poll of...Ch. 8 - P-Value Find the P-value in a test of the claim...Ch. 8 - Conclusions True or false: In hypothesis testing,...Ch. 8 - Conclusions True or false: The conclusion of fail...Ch. 8 - Uncertainty True or false: If correct methods of...Ch. 8 - Chi-Square Test In a test of the claim that = 15...Ch. 8 - Robust Explain what is meant by the statements...Ch. 8 - Equivalent Methods Which of the following...Ch. 8 - True/False Characterize each of the following...Ch. 8 - Politics A county clerk in Essex County, New...Ch. 8 - Prob. 3RECh. 8 - Red Blood Cell Count A simple random sample of 40...Ch. 8 - Perception and Reality In a presidential election,...Ch. 8 - BMI for Miss America A claimed trend of thinner...Ch. 8 - BMI for Miss America Use the same BMI indexes...Ch. 8 - Type I Error and Type II Error a. 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