>LCPO< FUND OF STATISTICS
>LCPO< FUND OF STATISTICS
5th Edition
ISBN: 9781034509998
Author: Sullivan
Publisher: PEARSON
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Chapter B.6, Problem 26AYU

Analyzing Journal Article Results Researchers (Brian G. Feagan et al. “Erythropoietin with Iron Supplementation to Prevent Allogeneic Blood Transfusion in Total Hip Joint Arthroplasty,” Annals of Internal Medicine, Vol. 133, No. 11) wanted to determine whether epoetin alfa was effective in increasing the hemoglobin concentration in patients undergoing hip arthroplasty. A complete medical history and physical of the patients was performed for screening purposes and eligible patients were identified. The researchers used a computer-generated schedule to assign the patients to the high-dose epoetin group, low-dose epoetin group, or placebo group. The study was double-blind. Based on ANOVA, it was determined that there were significant differences in the increase in hemoglobin concentration in the three groups with a P-value less than 0.001. The mean increase in hemoglobin in the high-dose epoetin group was 19.5 grams per liter (g/L), the mean increase in hemoglobin in the low-dose epoetin group was 17.2 g/L, and mean increase in hemoglobin in the placebo group was 1.2 g/L.

  1. (a) Why do you think it was necessary to screen patients for eligibility?
  2. (b) Why was a computer-generated schedule used to assign patients to the various treatment groups?
  3. (c) What does it mean for a study to be double-blind? Why do you think the researchers desired a double-blind study?
  4. (d) Interpret the reported P-value.
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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:ˆ A European call option with maturity T = 2 years and strike price K = 5;ˆ A European put option with maturity T = 2 years and strike price K = 5;ˆ An American call option with maturity T = 2 years and strike price K = 5;ˆ 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:ˆ A European call option with maturity T = 2 years and strike price K = 5;ˆ A European put option with maturity T = 2 years and strike price K = 5;ˆ An American call option with maturity T = 2 years and strike price K = 5;ˆ 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 B.6 Solutions

>LCPO< FUND OF STATISTICS

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