The mean and the standard deviation of the distribution p ^ 1 − p ^ 2 where the true proportion of successes for the first population is 0.3 and for the second population is 0.5 and taking 40 independent sample from the first population and 60 from the second.

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Answer 1

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Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

Chapter 8.2, Problem 68E

(a)

To determine

To find: The mean and the standard deviation of the distribution p^1−p^2 where the true proportion of successes for the first population is 0.3 and for the second population is 0.5 and taking 40 independent sample from the first population and 60 from the second.

(b)

To determine

To graph: The normal distribution of p^1−p^2 with mean −0.2 and standard deviation 0.09704 and mark the location of mean in the sketch.

(c)

To determine

To find: The value of d for which the probability is 0.95 where the sample proportion should be in the limit ±d . And mark d in the sketch of normal distribution of p^1−p^2.

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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…

What is the standard scores associated to the left of z is 0.1446

Answer 2

Question

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

Chapter 8.2, Problem 68E

(a)

To determine

To find: The mean and the standard deviation of the distribution p^1−p^2 where the true proportion of successes for the first population is 0.3 and for the second population is 0.5 and taking 40 independent sample from the first population and 60 from the second.

(b)

To determine

To graph: The normal distribution of p^1−p^2 with mean −0.2 and standard deviation 0.09704 and mark the location of mean in the sketch.

(c)

To determine

To find: The value of d for which the probability is 0.95 where the sample proportion should be in the limit ±d . And mark d in the sketch of normal distribution of p^1−p^2.

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Answer 3

Question

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

Chapter 8.2, Problem 68E

(a)

To determine

To find: The mean and the standard deviation of the distribution p^1−p^2 where the true proportion of successes for the first population is 0.3 and for the second population is 0.5 and taking 40 independent sample from the first population and 60 from the second.

(b)

To determine

To graph: The normal distribution of p^1−p^2 with mean −0.2 and standard deviation 0.09704 and mark the location of mean in the sketch.

(c)

To determine

To find: The value of d for which the probability is 0.95 where the sample proportion should be in the limit ±d . And mark d in the sketch of normal distribution of p^1−p^2.

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Answer 4

Question

Features Features Normal distribution is characterized by two parameters, mean (µ) and standard deviation (σ). When graphed, the mean represents the center of the bell curve and the graph is perfectly symmetric about the center. The mean, median, and mode are all equal for a normal distribution. The standard deviation measures the data's spread from the center. The higher the standard deviation, the more the data is spread out and the flatter the bell curve looks. Variance is another commonly used measure of the spread of the distribution and is equal to the square of the standard deviation.

Chapter 8.2, Problem 68E

(a)

To determine

To find: The mean and the standard deviation of the distribution p^1−p^2 where the true proportion of successes for the first population is 0.3 and for the second population is 0.5 and taking 40 independent sample from the first population and 60 from the second.

(b)

To determine

To graph: The normal distribution of p^1−p^2 with mean −0.2 and standard deviation 0.09704 and mark the location of mean in the sketch.

(c)

To determine

To find: The value of d for which the probability is 0.95 where the sample proportion should be in the limit ±d . And mark d in the sketch of normal distribution of p^1−p^2.

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Answer 5

Chapter 8.2, Problem 68E

(a)

To determine

To find: The mean and the standard deviation of the distribution p^1−p^2 where the true proportion of successes for the first population is 0.3 and for the second population is 0.5 and taking 40 independent sample from the first population and 60 from the second.

(b)

To determine

To graph: The normal distribution of p^1−p^2 with mean −0.2 and standard deviation 0.09704 and mark the location of mean in the sketch.

(c)

To determine

To find: The value of d for which the probability is 0.95 where the sample proportion should be in the limit ±d . And mark d in the sketch of normal distribution of p^1−p^2.

Answer 6

Chapter 8.2, Problem 68E

(a)

To determine

To find: The mean and the standard deviation of the distribution p^1−p^2 where the true proportion of successes for the first population is 0.3 and for the second population is 0.5 and taking 40 independent sample from the first population and 60 from the second.

Answer 7

Chapter 8.2, Problem 68E

(a)

To determine

To find: The mean and the standard deviation of the distribution p^1−p^2 where the true proportion of successes for the first population is 0.3 and for the second population is 0.5 and taking 40 independent sample from the first population and 60 from the second.

Answer 8

(b)

To determine

To graph: The normal distribution of p^1−p^2 with mean −0.2 and standard deviation 0.09704 and mark the location of mean in the sketch.

Answer 9

(b)

To determine

To graph: The normal distribution of p^1−p^2 with mean −0.2 and standard deviation 0.09704 and mark the location of mean in the sketch.

Answer 10

(c)

To determine

To find: The value of d for which the probability is 0.95 where the sample proportion should be in the limit ±d . And mark d in the sketch of normal distribution of p^1−p^2.

Answer 11

(c)

To determine

To find: The value of d for which the probability is 0.95 where the sample proportion should be in the limit ±d . And mark d in the sketch of normal distribution of p^1−p^2.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 8.1 - Prob. 1UYK Ch. 8.1 - Prob. 2UYK Ch. 8.1 - Prob. 3UYK Ch. 8.1 - Prob. 4UYK Ch. 8.1 - Prob. 5UYK Ch. 8.1 - Prob. 6UYK Ch. 8.1 - Prob. 7UYK Ch. 8.1 - Prob. 8UYK Ch. 8.1 - Prob. 9UYK Ch. 8.1 - Prob. 10UYK

The mean and the standard deviation of the distribution p ^ 1 − p ^ 2 where the true proportion of successes for the first population is 0.3 and for the second population is 0.5 and taking 40 independent sample from the first population and 60 from the second.

Solution Summary: The author calculates the mean and standard deviation of the distribution using the below mentioned formula.

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To find: The mean and the standard deviation of the distribution p^1−p^2 where the true proportion of successes for the first population is 0.3 and for the second population is 0.5 and taking 40 independent sample from the first population and 60 from the second.

To graph: The normal distribution of p^1−p^2 with mean −0.2 and standard deviation 0.09704 and mark the location of mean in the sketch.

To find: The value of d for which the probability is 0.95 where the sample proportion should be in the limit ±d . And mark d in the sketch of normal distribution of p^1−p^2.

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