ELEM.STATS>LL<W/CONNECT-FD
3rd Edition
ISBN: 9781265235239
Author: Navidi
Publisher: MCG
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Chapter 8.1, Problem 53E
a.
To determine
To find:The confidence interval that has the larger margin of error.
b.
To determine
To find: The confidence interval that is more likely to cover the population
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29% of all college students major in STEM (Science, Technology, Engineering, and Math). If 46 college students are randomly selected, find the probability thata. Exactly 11 of them major in STEM. b. At most 12 of them major in STEM. c. At least 11 of them major in STEM. d. Between 11 and 15 (including 11 and 15) of them major in STEM.
Please solving problem2
Problem1
We consider a two-period binomial model with the following properties: each period lastsone (1) year and the current stock price is S0 = 4. On each period, the stock price doubleswhen it moves up and is reduced by half when it moves down. The annual interest rateon the money market is 25%. (This model is the same as in Prob. 1 of HW#2).We consider four options on this market: A European call option with maturity T = 2 years and strike price K = 5; A European put option with maturity T = 2 years and strike price K = 5; An American call option with maturity T = 2 years and strike price K = 5; An American put option with maturity T = 2 years and strike price K = 5.(a) Find the price at time 0 of both European options.(b) Find the price at time 0 of both American options. Compare your results with (a)and comment.(c) For each of the American options, describe the optimal exercising strategy.
Problem 1.We consider a two-period binomial model with the following properties: each period lastsone (1) year and the current stock price is S0 = 4. On each period, the stock price doubleswhen it moves up and is reduced by half when it moves down. The annual interest rateon the money market is 25%.
We consider four options on this market: A European call option with maturity T = 2 years and strike price K = 5; A European put option with maturity T = 2 years and strike price K = 5; An American call option with maturity T = 2 years and strike price K = 5; An American put option with maturity T = 2 years and strike price K = 5.(a) Find the price at time 0 of both European options.(b) Find the price at time 0 of both American options. Compare your results with (a)and comment.(c) For each of the American options, describe the optimal exercising strategy.(d) We assume that you sell the American put to a market participant A for the pricefound in (b). Explain how you act on the market…
Chapter 8 Solutions
ELEM.STATS>LL<W/CONNECT-FD
Ch. 8.1 - In Exercises 17—20, fill in each blank with the...Ch. 8.1 - Prob. 18ECh. 8.1 - In Exercises 17—20, fill in each blank with the...Ch. 8.1 - In Exercises 17-20, fill in each blank with the...Ch. 8.1 - In Exercises 21-24, determine whether the...Ch. 8.1 - In Exercises 21-24, determine whether the...Ch. 8.1 - In Exercises 21-24, determine whether the...Ch. 8.1 - Prob. 24ECh. 8.1 - In Exercises 25-28, find the critical value z/2...Ch. 8.1 - In Exercises 25-28, find the critical value z/2...
Ch. 8.1 - In Exercises 25-28, find the critical value z/2...Ch. 8.1 - Prob. 28ECh. 8.1 - In Exercises 29-32, find the levels of the...Ch. 8.1 - In Exercises 29-32, find the levels of the...Ch. 8.1 - In Exercises 29-32, find the levels of the...Ch. 8.1 - In Exercises 29-32, find the levels of the...Ch. 8.1 - A sample of size n=49 is drawn from a population...Ch. 8.1 - Prob. 34ECh. 8.1 - A sample of size n=32 is drawn from a population...Ch. 8.1 - A sample of size n=64 is drawn from a population...Ch. 8.1 - A sample of sue n=10 is drawn from a normal...Ch. 8.1 - Prob. 38ECh. 8.1 - A population has standard deviation 21.3. How...Ch. 8.1 - Prob. 40ECh. 8.1 - A population has standard deviation =12.7 How...Ch. 8.1 - Prob. 42ECh. 8.1 - SAT scores: A college admissions officer takes a...Ch. 8.1 - Prob. 44ECh. 8.1 - Babies: According to the National Health...Ch. 8.1 - Watch your cholesterol: A sample of 314 patients...Ch. 8.1 - How smart is your phone? A random sample of 11...Ch. 8.1 - Stock prices: The Standard and Poors (S=50....Ch. 8.1 - High energy: A random sample of energy drinks had...Ch. 8.1 - Lets shake on it: A random sample of 12-ounce...Ch. 8.1 - Lifetime of electronics: In a simple random sample...Ch. 8.1 - Efficient manufacturing: Efficiency experts study...Ch. 8.1 - Prob. 53ECh. 8.1 - Prob. 54ECh. 8.1 - Prob. 55ECh. 8.1 - Prob. 56ECh. 8.1 - Prob. 57ECh. 8.1 - Prob. 58ECh. 8.1 - Which interval is which? Sam constructed three...Ch. 8.1 - Prob. 60ECh. 8.1 - Prob. 61ECh. 8.1 - Dont construct a confidence interval: A college...Ch. 8.1 - Interpret a confidence interval: A dean at a...Ch. 8.1 - Interpret a confidence interval: A survey...Ch. 8.1 - Interpret calculator display: The number of words...Ch. 8.1 - Prob. 66ECh. 8.1 - Prob. 67ECh. 8.1 - Prob. 68ECh. 8.1 - Prob. 69ECh. 8.1 - Prob. 70ECh. 8.2 - In Exercises 7 and 8, fill in each blank with the...Ch. 8.2 - Prob. 8ECh. 8.2 - Prob. 9ECh. 8.2 - Prob. 10ECh. 8.2 - Find the critical value t/2 needed to construct a...Ch. 8.2 - Find the critical value t/2 needed to construct a...Ch. 8.2 - A sample of size n=22 is drawn from a normal...Ch. 8.2 - A sample of size n=12 is drawn from a normal...Ch. 8.2 - A sample of size n=12 is drawn. Find the critical...Ch. 8.2 - A sample of size n=15 has sample mean x=2.1 and...Ch. 8.2 - A sample of size n=44 has sample mean x=56.9 and...Ch. 8.2 - A sample of size n=89 has sample mean x=87.2 and...Ch. 8.2 - A sample of size n=35 has sample mean x=34.85 and...Ch. 8.2 - Online courses: A sample of 263 students who were...Ch. 8.2 - Get an education: The General Social Survey asked...Ch. 8.2 - Fake Twitter followers: Many celebrities and...Ch. 8.2 - Lets go to the movies: A random sample of 35...Ch. 8.2 - Hip surgery: In a sample of 123 hip surgeries of a...Ch. 8.2 - Sound it out: Phonics is an instructional method...Ch. 8.2 - Software instruction: A hybrid course is one that...Ch. 8.2 - Baby talk: In a sample of 77 children, the mean...Ch. 8.2 - Baby weights: Following are weights: m pounds: of...Ch. 8.2 - Prob. 30ECh. 8.2 - Eat your spinach: Six measurements were made of...Ch. 8.2 - Mortgage rates: Following are interest rates...Ch. 8.2 - Hi-def: Following are prices of a random sample of...Ch. 8.2 - Big salary for the boss: Following is the total...Ch. 8.2 - Prob. 35ECh. 8.2 - Prob. 36ECh. 8.2 - Eat your kale: Kale is a type of cabbage commonly...Ch. 8.2 - Prob. 38ECh. 8.2 - Prob. 39ECh. 8.2 - Prob. 40ECh. 8.2 - Dont construct a confidence interval: There have...Ch. 8.2 - Dont construct a confidence interval: As of July...Ch. 8.2 - Prob. 43ECh. 8.2 - Prob. 44ECh. 8.2 - Prob. 45ECh. 8.2 - Prob. 46ECh. 8.2 - Prob. 47ECh. 8.3 - In Exercises 7 and 8, fill in each blank with the...Ch. 8.3 - In Exercises 7 and 8, fill in each blank with the...Ch. 8.3 - In Exercises 9 and 10, determine whether the...Ch. 8.3 - Prob. 10ECh. 8.3 - Prob. 11ECh. 8.3 - In Exercises 11-14, find the point estimate, the...Ch. 8.3 - In Exercises 11-14, find the point estimate, the...Ch. 8.3 - In Exercises 11-14, find the point estimate, the...Ch. 8.3 - In Exercises 15-18, use the given data to...Ch. 8.3 - In Exercises 15-18, use the given data to...Ch. 8.3 - In Exercises 15-18, use the given data to...Ch. 8.3 - In Exercises 15-18, use the given data to...Ch. 8.3 - Smart phone: Among 238 cell phone owners aged...Ch. 8.3 - Working at home: According to the U.S. Census...Ch. 8.3 - Sleep apnea: Sleep apnea is a disorder in which...Ch. 8.3 - Internet service: An Internet service provider...Ch. 8.3 - Volunteering: The General Social Survey asked 1294...Ch. 8.3 - SAT scores: A college admissions officer sampled...Ch. 8.3 - LOL: In the computer game League of Legends. some...Ch. 8.3 - Prob. 26ECh. 8.3 - Call me: A sociologist wants to construct a 95%...Ch. 8.3 - Reading proficiency: An educator wants to...Ch. 8.3 - Surgical complications: A medical researcher wants...Ch. 8.3 - Hows the economy? A pollster wants to construct a...Ch. 8.3 - Changing jobs: A sociologist sampled 200 people...Ch. 8.3 - Prob. 32ECh. 8.3 - Prob. 33ECh. 8.3 - Prob. 34ECh. 8.3 - Interpret calculator display: A sample of voters...Ch. 8.3 - Prob. 36ECh. 8.3 - Prob. 37ECh. 8.3 - Prob. 38ECh. 8.3 - Prob. 39ECh. 8.3 - Dont construct a confidence interval: At the end...Ch. 8.3 - Prob. 41ECh. 8.3 - Prob. 42ECh. 8.3 - Wilsons interval: The small-sample method for...Ch. 8.4 - In Exercises 5 and 6, fill in each blank with the...Ch. 8.4 - In Exercises 5 and 6, fill in each blank with the...Ch. 8.4 - In Exercises 7 and 8, determine whether the...Ch. 8.4 - Prob. 8ECh. 8.4 - Find the critical values for a 95% confidence...Ch. 8.4 - Find the critical values for a 99% confidence...Ch. 8.4 - Construct a 95% confidence interval for the...Ch. 8.4 - Construct a 99% confidence interval for the...Ch. 8.4 - SAT scores: Scores on the math SAT are normally...Ch. 8.4 - IQ scores: Scores on an IQ test are normally...Ch. 8.4 - Baby weights: are weights of 12 two-month-old baby...Ch. 8.4 - Eat your cereal: Boxes of cereal are labeled as...Ch. 8.4 - Eat your spinach: Six measurements were made of...Ch. 8.4 - Prob. 18ECh. 8.4 - Prob. 19ECh. 8.4 - Using the normal approximation: Refer to Exercise...Ch. 8.4 - Prob. 21ECh. 8.4 - More accuracy: Refer to Exercise 19. Use the more...Ch. 8.4 - Prob. 23ECh. 8.5 - In Exercises 5-12, state which type of parameter...Ch. 8.5 - In Exercises 5-12, state which type of parameter...Ch. 8.5 - In Exercises 5-12, state which type of parameter...Ch. 8.5 - Prob. 8ECh. 8.5 - In Exercises 5-12, state which type of parameter...Ch. 8.5 - In Exercises 5-12, state which type of parameter...Ch. 8.5 - In Exercises 5-12, state which type of parameter...Ch. 8.5 - In Exercises 5-12, state which type of parameter...Ch. 8.5 - Prob. 13ECh. 8.5 - Ages of students: A simple random sample of 100...Ch. 8.5 - Calories in bread: Following are the numbers of...Ch. 8.5 - Credit card debt: In a survey of 1118 U.S. adults...Ch. 8.5 - Windy place: Mt. Washington, New Hampshire, is one...Ch. 8.5 - An apple a day: Following are the numbers of grams...Ch. 8.5 - Pneumonia: In a simple random sample of 1500...Ch. 8.5 - Prob. 20ECh. 8 - Define the following terms: Point estimate...Ch. 8 - Prob. 2CQCh. 8 - Prob. 3CQCh. 8 - Construct a confidence interval for the population...Ch. 8 - Prob. 5CQCh. 8 - Prob. 6CQCh. 8 - Prob. 7CQCh. 8 - Prob. 8CQCh. 8 - Prob. 9CQCh. 8 - Prob. 10CQCh. 8 - Prob. 11CQCh. 8 - Prob. 12CQCh. 8 - Prob. 13CQCh. 8 - Prob. 14CQCh. 8 - Prob. 15CQCh. 8 - Prob. 1RECh. 8 - Prob. 2RECh. 8 - Cost of environmental restoration: In a survey of...Ch. 8 - Prob. 4RECh. 8 - Prob. 5RECh. 8 - Contaminated water: Polychlorinated biphenyls...Ch. 8 - Prob. 7RECh. 8 - Cost of repairs: A sample of eight repair records...Ch. 8 - Cost of repairs: Refer to Exercise 8. Assume the...Ch. 8 - Prob. 10RECh. 8 - Prob. 11RECh. 8 - Sleep time: In a sample of 87 young adults, the...Ch. 8 - Leaking tanks: Leakage from underground fuel tanks...Ch. 8 - Prob. 14RECh. 8 - Prob. 15RECh. 8 - Prob. 1WAICh. 8 - What factors can you think of that may affect the...Ch. 8 - Prob. 3WAICh. 8 - Prob. 4WAICh. 8 - Prob. 5WAICh. 8 - When constructing a confidence interval for , how...Ch. 8 - Prob. 7WAICh. 8 - Prob. 1CSCh. 8 - Prob. 2CSCh. 8 - Prob. 3CSCh. 8 - Prob. 4CSCh. 8 - Prob. 5CS
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