Pearson eText Introductory Statistics: Exploring the World Through Data -- Instant Access (Pearson+)
3rd Edition
ISBN: 9780136880882
Author: Robert Gould, Rebecca Wong
Publisher: PEARSON+
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Textbook Question
Chapter 9, Problem 28SE
Drinks A fast-food chain sells drinks that it calls HUGE. When we take a sample of 25 drinks and weigh them, we find that the
a. State how you would fill in the numbers below to do the calculation with a TI-84.
b. Report the confidence interval in a carefully worded sentence.
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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
Chapter 9 Solutions
Pearson eText Introductory Statistics: Exploring the World Through Data -- Instant Access (Pearson+)
Ch. 9 - Ages A study of all the students at a small...Ch. 9 - Units A survey of 100 random full-time students at...Ch. 9 - Exam Scores The distribution of the scores on a...Ch. 9 - Exam Scores The distribution of the scores on a...Ch. 9 - Showers According to home-water-works.org, the...Ch. 9 - Smartphones According to a 2017 report by ComScore...Ch. 9 - Retirement Income Several times during the year,...Ch. 9 - Time Employed A human resources manager for a...Ch. 9 - Driving (Example 1) Drivers in Wyoming drive more...Ch. 9 - Driving Drivers in Alaska drive fewer miles yearly...
Ch. 9 - Babies Weights (Example 2) Some sources report...Ch. 9 - Babies’ Weights, Again Some sources report that...Ch. 9 - (Example 3) Income in Maryland According to a 2018...Ch. 9 - Income in Kansas According to a 2018 Money...Ch. 9 - CLT Shapes (Example 4) One of the histograms is a...Ch. 9 - Used Van Costs One histogram shows the...Ch. 9 - (Example 5) Age of Used Vans The mean age of all...Ch. 9 - Student Ages The mean age of all 2550 students at...Ch. 9 - Prob. 19SECh. 9 - Prob. 20SECh. 9 - Prob. 21SECh. 9 - Prob. 22SECh. 9 - Private University Tuition (Example 7) A random...Ch. 9 - Random Numbers If you take samples of 40 lines...Ch. 9 - t* (Example 8) A researcher collects one sample of...Ch. 9 - t* A researcher collects a sample of 25...Ch. 9 - Heights of 12th Graders (Example 9) A random...Ch. 9 - Drinks A fast-food chain sells drinks that it...Ch. 9 - Men’s Pulse Rates (Example 10) A random sample of...Ch. 9 - Travel Time to School A random sample of 50...Ch. 9 - RBIs (Example 11) A random sample of 25 baseball...Ch. 9 - RBIs Again In exercise 9.31, two intervals were...Ch. 9 - Confidence Interval Changes State whether each of...Ch. 9 - Confidence Interval Changes State whether each of...Ch. 9 - Potatoes The weights of four randomly and...Ch. 9 - Tomatoes The weights of four randomly and...Ch. 9 - Human Body Temperatures (Example 12) A random...Ch. 9 - Reaction Distance Data on the disk and website...Ch. 9 - Potatoes Use the data from exercise 9.35. a. If...Ch. 9 - Tomatoes Use the data from exercise 9.36. a. Using...Ch. 9 - Cholesterol In the U.S. Department of Health has...Ch. 9 - BMI A body mass index (BMI) of more than 25 is...Ch. 9 - Male Height In the United States, the population...Ch. 9 - Female Height In the United States, the population...Ch. 9 - Deflated Footballs? Patriots In the 2015 AFC...Ch. 9 - Deflated Footballs? Colts In the 2015 AFC...Ch. 9 - Movie Ticket Prices According to Deadline.com, the...Ch. 9 - Broadway Ticket Prices According to Statista.com,...Ch. 9 - Atkins Diet Difference Ten people went on an...Ch. 9 - Pulse Difference The following numbers are the...Ch. 9 - Student Ages Suppose that 200 statistics students...Ch. 9 - Presidents’ Ages at Inauguration A 95 confidence...Ch. 9 - Independent or Paired (Example 13) State whether...Ch. 9 - Independent or Paired State whether each situation...Ch. 9 - Televisions: CI (Example 14) Minitab output is...Ch. 9 - Pulse and Gender: CI Using data from NHANES, we...Ch. 9 - Televisions (Example 15) The table shows the...Ch. 9 - Pulse Rates Using data from NHANES, we looked at...Ch. 9 - Triglycerides Triglycerides are a form of fat...Ch. 9 - Systolic Blood Pressures When you have your blood...Ch. 9 - Triglycerides, Again Report and interpret the 95...Ch. 9 - Blood Pressures, Again Report and interpret the 95...Ch. 9 - Baseball Salaries A random sample of 40...Ch. 9 - College Athletes’ Weights A random sample of male...Ch. 9 - Baseball Salaries In exercise 9.63 you could not...Ch. 9 - College Athletes’ Weights In exercise 9.64, you...Ch. 9 - Textbook Prices, UCSB vs. CSUN (Example 16) The...Ch. 9 - Textbook Prices. OC vs. CSUN The prices of a...Ch. 9 - Females’ Pulse Rates before and after a Fright...Ch. 9 - Males’ Pulse Rates before and after a Fright...Ch. 9 - Organic Food A student compared organic food...Ch. 9 - Body Temperature The body temperatures of 65 men...Ch. 9 - Ales vs. IPAs Data were collected on calorie...Ch. 9 - Surfers Surfers and statistics students Rex...Ch. 9 - Self-Reported Heights of Men (Example 18) A random...Ch. 9 - Eating Out Jacqueline Loya, a statistics student,...Ch. 9 - Prob. 77SECh. 9 - Self-Driving Cars A survey of asked respondents...Ch. 9 - Women’s Heights Assume women’s heights are...Ch. 9 - Showers According to home-water-works.org, the...Ch. 9 - Choose a test for each situation: one-sample...Ch. 9 - Choose a t-test for each situation: one-sample...Ch. 9 - Cones: 3 Tests A McDonald’s fact sheet says its...Ch. 9 - Prob. 84CRECh. 9 - Brain Size Brain size for 20 random women and 20...Ch. 9 - Reducing Pollution A random sample of 12th-grade...Ch. 9 - Heart Rate before and after Coffee Elena Lucin, a...Ch. 9 - Exam Grades The final exam grades for a sample of...Ch. 9 - Hours of Television Viewing The number of hours...Ch. 9 - Reaction Distances Reaction distances in...Ch. 9 - Ales vs. Lagers Data were collected on calorie...Ch. 9 - Weights of Hockey and Baseball Players Data were...Ch. 9 - Grocery Delivery The table shows the prices for...Ch. 9 - Parents The following table shows the heights (in...Ch. 9 - Why Is n1 in the Sample Standard Deviation? Why do...Ch. 9 - Prob. 96CRECh. 9 - Construct two sets of body temperatures (in...Ch. 9 - Construct heights for 3 or more sets of twins (6...
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- Note: The purpose of this problem below is to use computational techniques (Excelspreadsheet, Matlab, R, Python, etc.) and code the dynamic programming ideas seen inclass. Please provide the numerical answer to the questions as well as a sample of yourwork (spreadsheet, code file, etc.).We consider an N-period binomial model with the following properties: N = 60, thecurrent stock price is S0 = 1000; on each period, the stock price increases by 0.5% whenit moves up and decreases by 0.3% when it moves down. The annual interest rate on themoney market is 5%. (Notice that this model is a CRR model, which means that thebinomial tree is recombining.)(a) Find the price at time t0 = 0 of a (European) call option with strike price K = 1040and maturity T = 1 year.(b) Find the price at time t0 = 0 of a (European) put option with strike price K = 1040and maturity T = 1 year.(c) We consider now, that you are at time t5 (i.e. after 5 periods, which represents 1month later). Assume that the stock…arrow_forwardshow work in paperarrow_forwardshow all work (...or what you entered into your calculator...)arrow_forward
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