EXCURSIONS IN MOD.MATH W/ACCESS >BI<
9th Edition
ISBN: 9781323788721
Author: Tannenbaum
Publisher: PEARSON C
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 9, Problem 56E
To determine
(a)
To Find:
The value of
To determine
(b)
To conclude:
The prediction of the logistic growth model if the long term for the given population.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Several 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.
We 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
So
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…
Chapter 9 Solutions
EXCURSIONS IN MOD.MATH W/ACCESS >BI<
Ch. 9 - Consider the sequence defined by the explicit...Ch. 9 - Consider the sequence defined by the explicit...Ch. 9 - Consider the sequence defined by the explicit...Ch. 9 - Consider the sequence defined by the explicit...Ch. 9 - Consider the sequence defined by the explicit...Ch. 9 - Consider the sequence defined by the explicit...Ch. 9 - Consider the sequence defined by the explicit...Ch. 9 - Consider the sequence defined by the explicit...Ch. 9 - Consider the sequence defined by the explicit...Ch. 9 - Consider the sequence 1,4,9,16,25,.... a. List the...
Ch. 9 - Consider the sequence 1,2,6,24,120,.... a. List...Ch. 9 - Consider the sequence 0,1,3,6,10,15,21.... a. List...Ch. 9 - Prob. 14ECh. 9 - Consider the sequence 1,85,2,167,208,.... a. List...Ch. 9 - Prob. 16ECh. 9 - Airlines would like to board passengers in the...Ch. 9 - When two fair coins are tossed the probability of...Ch. 9 - Consider a population that grows linearly...Ch. 9 - Consider a population that grows linearly...Ch. 9 - Consider a population that grows linearly...Ch. 9 - Consider a population that grows linearly...Ch. 9 - Consider a population that grows linearly, with...Ch. 9 - Consider a population that grows linearly, with...Ch. 9 - Official unemployment rates for the U.S....Ch. 9 - The world population reached 6 billion people in...Ch. 9 - The Social Security Administration uses a linear...Ch. 9 - While the number of smokers for the general adult...Ch. 9 - Use the arithmetic sum formula to find the sum...Ch. 9 - Prob. 30ECh. 9 - An arithmetic sequence has first term P0=12 and...Ch. 9 - An arithmetic sequence has first term P0=1 and...Ch. 9 - Find the sum a. 1+3+5+7++149.Hint: See Example...Ch. 9 - Find the sum a. 2+4+6++98. b. 2+4+6+75terms.Ch. 9 - The city of Lightsville currently has 137...Ch. 9 - Prob. 36ECh. 9 - A population grows according to an exponential...Ch. 9 - A population grows according to an exponential...Ch. 9 - A population grows according to the recursive rule...Ch. 9 - Prob. 40ECh. 9 - Crime in Happyville is on the rise. Each year the...Ch. 9 - Prob. 42ECh. 9 - Prob. 43ECh. 9 - Avian influenza A H5N1 is a particularly virulent...Ch. 9 - In 2010 the undergraduate enrollment at Bright...Ch. 9 - In 2009 there were 73 cases of avian influenza A...Ch. 9 - Consider the geometric sequence P0=2, P1=6, P2=18,...Ch. 9 - Consider the geometric sequence P0=4, P1=6, P2=9,...Ch. 9 - Consider the geometric sequence P0=4, P1=2, P2=1,....Ch. 9 - Consider the geometric sequence P0=10, P1=2,...Ch. 9 - Find the sum a. 1+2+22+23++215. b. 1+2+22+23++2N1...Ch. 9 - Find the sum a. 1+3+32+33++310. b. 1+3+32+33++3N1....Ch. 9 - A population grows according to the logistic...Ch. 9 - A population grows according to the logistic...Ch. 9 - For the population discussed in Exercise 53...Ch. 9 - Prob. 56ECh. 9 - Prob. 57ECh. 9 - Prob. 58ECh. 9 - Prob. 59ECh. 9 - Prob. 60ECh. 9 - A population grows according to the logistic...Ch. 9 - A population grows according to the logistic...Ch. 9 - Each of the following sequences follows a linear,...Ch. 9 - Each of the line graph shown in Figs. 9-19 through...Ch. 9 - Prob. 65ECh. 9 - Prob. 66ECh. 9 - Prob. 67ECh. 9 - Prob. 68ECh. 9 - Prob. 69ECh. 9 - Prob. 70ECh. 9 - Prob. 71ECh. 9 - Prob. 72ECh. 9 - Prob. 73ECh. 9 - Prob. 74ECh. 9 - Prob. 75ECh. 9 - Show that if P0,P1,P2,... is an arithmetic...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, subject and related others by exploring similar questions and additional content below.Similar questions
- In 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_forwardNo chatgpt pls will upvote Alreadyarrow_forwardFind the LaPla se trnsofrom of a) chi-square Distribution. b) Normal Distribution. C) Gamma Distribution. prove that Binomial (n, 2) Poisson (2) *********************arrow_forward
- 2.2, 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_forwardT 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_forwardH.w WI M Wz dy A Sindax Sind ①dlmax У тах at 0.75m from A W=6KN/M L=2 W2 = 9 KN/m P= 10 KN Barrow_forward
- No chatgpt pls will upvotearrow_forwardQ4*) Find the extremals y, z of the the functional 1 = √² (2yz — 2z² + y² — z¹²) dx, - - with y(0) = 0, y(1) = 1, z(0) = 0, z(1) = 0.arrow_forwardlet h0, h1, h2,..., hn,....be the sequence defined by hn = (n C 2), (n choose 2). (n>=0). Determine the generating function for the sequence.arrow_forward
- Draw the triangle and show all the workarrow_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
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Algebra & Trigonometry with Analytic GeometryAlgebraISBN:9781133382119Author:SwokowskiPublisher:Cengage
Glencoe Algebra 1, Student Edition, 9780079039897...AlgebraISBN:9780079039897Author:CarterPublisher:McGraw Hill
College AlgebraAlgebraISBN:9781305115545Author:James Stewart, Lothar Redlin, Saleem WatsonPublisher:Cengage Learning
College Algebra (MindTap Course List)AlgebraISBN:9781305652231Author:R. David Gustafson, Jeff HughesPublisher:Cengage Learning
Algebra & Trigonometry with Analytic Geometry
Algebra
ISBN:9781133382119
Author:Swokowski
Publisher:Cengage
Glencoe Algebra 1, Student Edition, 9780079039897...
Algebra
ISBN:9780079039897
Author:Carter
Publisher:McGraw Hill
College Algebra
Algebra
ISBN:9781305115545
Author:James Stewart, Lothar Redlin, Saleem Watson
Publisher:Cengage Learning
College Algebra (MindTap Course List)
Algebra
ISBN:9781305652231
Author:R. David Gustafson, Jeff Hughes
Publisher:Cengage Learning
01 - What Is A Differential Equation in Calculus? Learn to Solve Ordinary Differential Equations.; Author: Math and Science;https://www.youtube.com/watch?v=K80YEHQpx9g;License: Standard YouTube License, CC-BY
Higher Order Differential Equation with constant coefficient (GATE) (Part 1) l GATE 2018; Author: GATE Lectures by Dishank;https://www.youtube.com/watch?v=ODxP7BbqAjA;License: Standard YouTube License, CC-BY
Solution of Differential Equations and Initial Value Problems; Author: Jefril Amboy;https://www.youtube.com/watch?v=Q68sk7XS-dc;License: Standard YouTube License, CC-BY