Elementary Statistics: A Step By Step Approach
10th Edition
ISBN: 9781259755330
Author: Allan G. Bluman
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 9, Problem 2DA
To determine
To test: Whether there is sufficient to support the claim that the means are different.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Question 4. We consider a CRR model with So == 5 and up and down factors u = 1.03 and
d = 0.96. We consider the interest rate r = 4% (over one period). Is this a suitable CRR
model? (Explain your answer.)
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.)
Question 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.)
Chapter 9 Solutions
Elementary Statistics: A Step By Step Approach
Ch. 9.1 - Home Runs For a sports radio talk show, you are...Ch. 9.1 - Explain the difference between testing a single...Ch. 9.1 - When a researcher selects all possible pairs of...Ch. 9.1 - What three assumptions must be met when you are...Ch. 9.1 - Show two different ways to state that the means of...Ch. 9.1 - For Exercises 5 through 16, perform each of the...Ch. 9.1 - For Exercises 5 through 16, perform each of the...Ch. 9.1 - For Exercises 5 through 16, perform each of the...Ch. 9.1 - For Exercises 5 through 16, perform each of the...Ch. 9.1 - For Exercises 5 through 16, perform each of the...
Ch. 9.1 - For Exercises 5 through 16, perform each of the...Ch. 9.1 - For Exercises 5 through 16, perform each of the...Ch. 9.1 - For Exercises 5 through 16, perform each of the...Ch. 9.1 - Prob. 13ECh. 9.1 - For Exercises 5 through 16, perform each of the...Ch. 9.1 - Self-Esteem Scores In a study of a group of women...Ch. 9.1 - Ages of College Students The dean of students...Ch. 9.1 - Working Breath Rate Two random samples of 32...Ch. 9.1 - Traveling Distances Find the 95% confidence...Ch. 9.1 - Prob. 19ECh. 9.1 - Prob. 20ECh. 9.1 - Television Watching The average number of hours of...Ch. 9.1 - For Exercises 5 through 16, perform each of the...Ch. 9.1 - Prob. 23ECh. 9.1 - Home Prices According to the almanac, the average...Ch. 9.1 - Exam Scores at Private and Public Schools A...Ch. 9.1 - Sale Prices for Houses The average sales price of...Ch. 9.1 - Average Earnings for College Graduates The average...Ch. 9.2 - Too Long on the Telephone A company collects data...Ch. 9.2 - For these exercises, perform each of these steps....Ch. 9.2 - For these exercises, perform each of these steps....Ch. 9.2 - Prob. 3ECh. 9.2 - Prob. 4ECh. 9.2 - For these exercises, perform each of these steps....Ch. 9.2 - For these exercises, perform each of these steps....Ch. 9.2 - For these exercises, perform each of these steps....Ch. 9.2 - For these exercises, perform each of these steps....Ch. 9.2 - Prob. 9ECh. 9.2 - Find the 95% confidence interval for the...Ch. 9.2 - Prob. 11ECh. 9.2 - Prob. 12ECh. 9.2 - Prob. 13ECh. 9.2 - Prob. 14ECh. 9.2 - Prob. 15ECh. 9.2 - Ages of Homes Whiting, Indiana, leads the Top 100...Ch. 9.2 - Prob. 17ECh. 9.2 - Out-of-State Tuitions The out-of-state tuitions...Ch. 9.2 - Gasoline Prices A random sample of monthly...Ch. 9.2 - For these exercises, perform each of these steps....Ch. 9.2 - Prob. 21ECh. 9.2 - Prob. 22ECh. 9.3 - Air Quality As a researcher for the EPA, you have...Ch. 9.3 - Classify each as independent or dependent samples....Ch. 9.3 - For Exercises 2 through 12, perform each of these...Ch. 9.3 - For Exercises 2 through 12, perform each of these...Ch. 9.3 - For Exercises 2 through 12, perform each of these...Ch. 9.3 - For Exercises 2 through 12, perform each of these...Ch. 9.3 - For Exercises 2 through 12, perform each of these...Ch. 9.3 - For Exercises 2 through 12, perform each of these...Ch. 9.3 - For Exercises 2 through 12, perform each of these...Ch. 9.3 - For Exercises 2 through 12, perform each of these...Ch. 9.3 - Toy Assembly Test An educational researcher...Ch. 9.3 - For Exercises 2 through 12, perform each of these...Ch. 9.3 - For Exercises 2 through 12, perform each of these...Ch. 9.3 - Prob. 13ECCh. 9.4 - Smoking and Education You are researching the...Ch. 9.4 - Prob. 1ECh. 9.4 - Find p and q for each. a. n = 36, X = 20 b. n =...Ch. 9.4 - Prob. 3ECh. 9.4 - Find each X, given p. a. p = 0.24, n = 300 b. p =...Ch. 9.4 - Prob. 5ECh. 9.4 - Find p and q. a. X1 = 6, n1 = 15, X2 = 9, n2 = 15...Ch. 9.4 - For Exercises 7 through 27, perform these steps....Ch. 9.4 - Leisure Time In a sample of 150 men, 132 said that...Ch. 9.4 - Prob. 9ECh. 9.4 - For Exercises 7 through 27, perform each of these...Ch. 9.4 - Prob. 11ECh. 9.4 - For Exercises 7 through 27, perform each of these...Ch. 9.4 - Prob. 13ECh. 9.4 - For Exercises 7 through 27, perform each of these...Ch. 9.4 - Prob. 15ECh. 9.4 - Smoking Survey National statistics show that 23%...Ch. 9.4 - For Exercises 7 through 27, perform each of these...Ch. 9.4 - For Exercises 7 through 27, perform each of these...Ch. 9.4 - Prob. 19ECh. 9.4 - For Exercises 7 through 27, perform these steps....Ch. 9.4 - For Exercises 7 through 27, perform these steps....Ch. 9.4 - For Exercises 7 through 27, perform these steps....Ch. 9.4 - For Exercises 7 through 27, perform these steps....Ch. 9.4 - For Exercises 7 through 27, perform these steps....Ch. 9.4 - For Exercises 7 through 27, perform these steps....Ch. 9.4 - For Exercises 7 through 27, perform these steps....Ch. 9.4 - For Exercises 7 through 27, perform these steps....Ch. 9.4 - Prob. 28ECCh. 9.5 - Automatic Transmissions Assume the following data...Ch. 9.5 - When one is computing the F test value, what...Ch. 9.5 - Why is the critical region always on the right...Ch. 9.5 - What are the two different degrees of freedom...Ch. 9.5 - What are the characteristics of the F...Ch. 9.5 - Prob. 5ECh. 9.5 - Using Table H, find the critical value for each....Ch. 9.5 - Prob. 7ECh. 9.5 - Using Table H, find the P-value interval for each...Ch. 9.5 - Prob. 9ECh. 9.5 - For Exercises 9 through 24, perform the following...Ch. 9.5 - For Exercises 9 through 24, perform the following...Ch. 9.5 - For Exercises 9 through 24, perform the following...Ch. 9.5 - Prob. 13ECh. 9.5 - For Exercises 9 through 24, perform the following...Ch. 9.5 - For Exercises 9 through 24, perform the following...Ch. 9.5 - For Exercises 9 through 24, perform the following...Ch. 9.5 - Prob. 17ECh. 9.5 - For Exercises 9 through 24, perform the following...Ch. 9.5 - For Exercises 9 through 24, perform the following...Ch. 9.5 - For Exercises 9 through 24, perform the following...Ch. 9.5 - Prob. 21ECh. 9.5 - For Exercises 9 through 24, perform the following...Ch. 9.5 - For Exercises 9 through 24, perform the following...Ch. 9.5 - For Exercises 9 through 24, perform the following...Ch. 9 - For each exercise, perform these steps. Assume...Ch. 9 - Prob. 9.1.2RECh. 9 - Prob. 9.2.3RECh. 9 - Prob. 9.2.4RECh. 9 - For each exercise, perform these steps. Assume...Ch. 9 - For each exercise, perform these steps. Assume...Ch. 9 - High and Low Temperatures March is a month of...Ch. 9 - Testing After Review A statistics class was given...Ch. 9 - Lay Teachers in Religious Schools A study found a...Ch. 9 - Prob. 9.4.10RECh. 9 - Prob. 9.5.11RECh. 9 - Heights of World Famous Cathedrals The heights (in...Ch. 9 - Prob. 9.5.13RECh. 9 - Prob. 1DACh. 9 - Prob. 2DACh. 9 - Prob. 3DACh. 9 - Prob. 4DACh. 9 - Prob. 5DACh. 9 - Prob. 1CQCh. 9 - Prob. 2CQCh. 9 - Prob. 3CQCh. 9 - Prob. 4CQCh. 9 - Prob. 5CQCh. 9 - To test the equality of two proportions, you would...Ch. 9 - Prob. 7CQCh. 9 - Prob. 8CQCh. 9 - Complete these statements with the best answer. 9....Ch. 9 - Prob. 10CQCh. 9 - Prob. 11CQCh. 9 - Prob. 12CQCh. 9 - Prob. 13CQCh. 9 - Prob. 14CQCh. 9 - Prob. 15CQCh. 9 - Prob. 16CQCh. 9 - For these exercises, perform each of these steps....Ch. 9 - Prob. 18CQCh. 9 - Prob. 19CQCh. 9 - Mathematical Skills In an effort to improve the...Ch. 9 - Prob. 21CQCh. 9 - Prob. 22CQCh. 9 - Prob. 23CQCh. 9 - Prob. 24CQCh. 9 - Prob. 25CQ
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, statistics and related others by exploring similar questions and additional content below.Similar questions
- Question 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_forwardSeveral 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_forward
- In 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_forwardIn 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_forward2.2, 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_forward
- T 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_forwardThe average miles per gallon for a sample of 40 cars of model SX last year was 32.1, with a population standard deviation of 3.8. A sample of 40 cars from this year’s model SX has an average of 35.2 mpg, with a population standard deviation of 5.4. Find a 99 percent confidence interval for the difference in average mpg for this car brand (this year’s model minus last year’s).Find a 99 percent confidence interval for the difference in average mpg for last year’s model minus this year’s. What does the negative difference mean?arrow_forwardA special interest group reports a tiny margin of error (plus or minus 0.04 percent) for its online survey based on 50,000 responses. Is the margin of error legitimate? (Assume that the group’s math is correct.)arrow_forward
- Suppose that 73 percent of a sample of 1,000 U.S. college students drive a used car as opposed to a new car or no car at all. Find an 80 percent confidence interval for the percentage of all U.S. college students who drive a used car.What sample size would cut this margin of error in half?arrow_forwardYou want to compare the average number of tines on the antlers of male deer in two nearby metro parks. A sample of 30 deer from the first park shows an average of 5 tines with a population standard deviation of 3. A sample of 35 deer from the second park shows an average of 6 tines with a population standard deviation of 3.2. Find a 95 percent confidence interval for the difference in average number of tines for all male deer in the two metro parks (second park minus first park).Do the parks’ deer populations differ in average size of deer antlers?arrow_forwardSuppose that you want to increase the confidence level of a particular confidence interval from 80 percent to 95 percent without changing the width of the confidence interval. Can you do it?arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Differential Equation | MIT 18.01SC Single Variable Calculus, Fall 2010; Author: MIT OpenCourseWare;https://www.youtube.com/watch?v=HaOHUfymsuk;License: Standard YouTube License, CC-BY