Adigital option is one in which the payoff depends in a discontinuous way on the asset price. The simplest example is the cash-or-nothing option, in which the payoff to the holder at maturity T is X1{ST>K} where X is some prespecified cash sum. Suppose that an asset price evolves according to the binomial model in which, at each step, the asset price moves from its current value Sn to one of Snu and Snd. As usual, if T denotes the length of each time step, d < erT < u. Find the time zero price of the above option. You may leave your answer as a sum.

Answers

Answer 1

Answer:

[tex]V_{0} = e^{-rt}[/tex] ∑ [tex]uPdx^{(1-p)} *S_{o}[/tex]  

Step-by-step explanation:

The Payoff to the holder at maturity T = X1{ST > K}, where X = pre-specified cash sum.

Current value of asset price = Sn  after evolvement of asset price in reference to binomial model

Hence at every  step value changes to SnU and Snd

where ; d < e^rΔT < u  and Δ T = length of each step

u = ups

d = downs

Determine the time zero price of the above option

First we will find the price after each period

After one period :

when the price goes up, Sn + ΔT = Su

when the price goes down, Sn + ΔT = Sd

After  period two

For Su

when price goes up, Sn +2ΔT = Su2

when price goes down, Sn +2ΔT = Sud

For Sd

when  price goes down, Sn +2ΔT = Sd2

when price goes up, Sn +2ΔT = Sdu

To get the time zero price we will have to apply the same procedure in reverse position den get the sum pf all ups and downs which is

sum of all ups and downs = [tex]e^{-rT}[/tex]∑ [tex]uPd^{(1-p)}[/tex]

[tex]V_{0} = e^{-rt}[/tex] ∑ [tex]uPdx^{(1-p)} *S_{o}[/tex]  


Related Questions

Solve The Following Problems

Answers

Answer:

1A. y=13

1B. Top and bottom angle are 124 and side angles are 56

2A. y=15

2b. Left angle = 80 Right angle = 100

Step-by-step explanation:

1 equal both equations together then solve for y. plug in y to get the angles

2 add both equations together then equal it to 180 degrees then solve for y. plug in y to get the angles

Step-by-step explanation:

For 1A

2y + 98° = 9y + 7° < being vertically opposite angles >

9y - 2y = 98° - 7°

7y = 91°

y = 13°

For 1B

9y + 7° = 9 * 13° + 7° = 124°

2y + 98° = 2 * 13° + 98° = 124°

The angles which are unknown are also vertically opposite angles so let unknown angles be x then

124° + 124 ° + x +x = 360° { being complete turn }

248° + 2x = 360°

2x = 112°

x = 56°

so all angles are 124° , 124° , 56°, 56°

For 2A

6y - 10 + 6y + 10 = 180° ( being linear pair)

12y = 180°

y= 15°

For 2B

6y - 10 = 6 * 15 - 10 = 80°

6y + 10 = 6 * 15 + 10 = 100°

Hope it will help :)

WORTH 10 POINTS :)



Bo paid with 1/2 of his paycheck about 1/5 of the remainder in savings. The rest of his paycheck he divided equally among the college accounts of his 3 children.

1. What fraction of his paycheck went into each child's account?

2. If bo deposited $400 in each child's account, how much money was in Bo's original paycheck?​

Answers

Answer:for college, 1-1/2-1/5 = 3/10. Divided by 3 children, 3/10 /3 = 1/10

B. 400 = 1/10 of the total (from above), so 400 = x/10. x = 400*10 = 4000

Step-by-step explanation:

Answer:

1. 1/6 2. $2400

Step-by-step explanation:

If Bo had 1/2 of his paycheck leftover to divide among his 3 kids, 1/2 divided by 3 is 1/6.

If 1/6 of his paycheck is $400, then all 6/6 of his paycheck would be $2400.

What is the sum of the measures of the exterior angles of a 32-gon. A. 180° B. 360° C. 148° D.5400°​

Answers

the sum of the measures of the exterior angles of a 32-gon is d. 5400

f(x)=−x 2 −4x−19 find f(-9)

Answers

Answer= Let f" role="presentation" style="box-sizing: inherit; margin: 0px; padding: 0px; border: 0px; font-style: normal; font-variant: inherit; font-weight: normal; font-stretch: inherit; line-height: normal; font-family: inherit; font-size: 15px; vertical-align: baseline; display: inline; text-indent: 0px; text-align: left; text-transform: none; letter-spacing: normal; word-spacing: normal; overflow-wrap: normal; white-space: nowrap; float: none; direction: ltr; max-width: none; max-height: none; min-width: 0px; min-height: 0px; position: relative;">ff be the function defined by

f(x)=x2&#x2212;4x" role="presentation" style="box-sizing: inherit; margin: 0px; padding: 0px; border: 0px; font-style: normal; font-variant: inherit; font-weight: normal; font-stretch: inherit; line-height: normal; font-family: inherit; font-size: 15px; vertical-align: baseline; display: inline; text-indent: 0px; text-align: center; text-transform: none; letter-spacing: normal; word-spacing: normal; overflow-wrap: normal; white-space: nowrap; float: none; direction: ltr; max-width: none; max-height: none; min-width: 0px; min-height: 0px; position: relative;">f(x)=x2−4xf(x)=x2−4x

for x&#x2265;2" role="presentation" style="box-sizing: inherit; margin: 0px; padding: 0px; border: 0px; font-style: normal; font-variant: inherit; font-weight: normal; font-stretch: inherit; line-height: normal; font-family: inherit; font-size: 15px; vertical-align: baseline; display: inline; text-indent: 0px; text-align: left; text-transform: none; letter-spacing: normal; word-spacing: normal; overflow-wrap: normal; white-space: nowrap; float: none; direction: ltr; max-width: none; max-height: none; min-width: 0px; min-height: 0px; position: relative;">x≥2x≥2. Find the inverse function indicating its domain and the range.

When I try to make x" role="presentation" style="box-sizing: inherit; margin: 0px; padding: 0px; border: 0px; font-style: normal; font-variant: inherit; font-weight: normal; font-stretch: inherit; line-height: normal; font-family: inherit; font-size: 15px; vertical-align: baseline; display: inline; text-indent: 0px; text-align: left; text-transform: none; letter-spacing: normal; word-spacing: normal; overflow-wrap: normal; white-space: nowrap; float: none; direction: ltr; max-width: none; max-height: none; min-width: 0px; min-height: 0px; position: relative;">xx the subject I get +" role="presentation" style="box-sizing: inherit; margin: 0px; padding: 0px; border: 0px; font-style: normal; font-variant: inherit; font-weight: normal; font-stretch: inherit; line-height: normal; font-family: inherit; font-size: 15px; vertical-align: baseline; display: inline; text-indent: 0px; text-align: left; text-transform: none; letter-spacing: normal; word-spacing: normal; overflow-wrap: normal; white-space: nowrap; float: none; direction: ltr; max-width: none; max-height: none; min-width: 0px; min-height: 0px; position: relative;">++and &#x2212;" role="presentation" style="box-sizing: inherit; margin: 0px; padding: 0px; border: 0px; font-style: normal; font-variant: inherit; font-weight: normal; font-stretch: inherit; line-height: normal; font-family: inherit; font-size: 15px; vertical-align: baseline; display: inline; text-indent: 0px; text-align: left; text-transform: none; letter-spacing: normal; word-spacing: normal; overflow-wrap: normal; white-space: nowrap; float: none; direction: ltr; max-width: none; max-height: none; min-width: 0px; min-height: 0px; position: relative;">−− two answers for the inverse function. Is it the proper answer? The answer I got is

x=2&#x00B1;y+4." role="presentation" style="box-sizing: inherit; margin: 0px; padding: 0px; border: 0px; font-style: normal; font-variant: inherit; font-weight: normal; font-stretch: inherit; line-height: normal; font-family: inherit; font-size: 15px; vertical-align: baseline; display: inline; text-indent: 0px; text-align: center; text-transform: none; letter-spacing: normal; word-spacing: normal; overflow-wrap: normal; white-space: nowrap; float: none; direction: ltr; max-width: none; max-height: none; min-width: 0px; min-height: 0px; position: relative;">x=2±y+4−−−−√.x=2±y+4.

Is it correct and how do I determine the domain and range of the function? Thanks

8. what is the volume of these 5 objects

Answers

Answer:

1) B

Step-by-step explanation:

To get the volume of a cube, you multiply the length, width and height together. 4 x 7 x 8 = 224. 8 × 5 × 6 = 240. This means that chocolate box B has the larger volume.

NEED HELP WITH FUNCTIONS

Answers

Answer:

#############################

f(x)=−x 2 −4x−19 find f(-9)

Answers

Answer:

64

Step-by-step explanation:

The value of the function f(x) = x² −4x−19 at the value x = -9 will be 98.

What is a function?

A function in mathematics from a set X to a set Y allocates exactly one element of Y to each element of X. The sets X and Y are collectively referred to as the function's domain and codomain, respectively.

A function is defined as the expression that set up the relationship between the dependent variable and independent variable.

Given function is f(x) = x² −4x−19. The value of the function at f(-9) will be calculated as:-

f(x) = x² −4x−19

f(-9) = ( -9 )² - ( 4 x --9 ) - 19

f(-9) = 81 + 36 - 19

f(-9) = 98

Therefore, the value of the function f(x) = x² −4x−19 at the value x = -9 will be 98.

To know more about functions follow

https://brainly.com/question/17043948

#SPJ2

An economist wants to predict the Gini of the US by Year. Select the answer choice that correctly interprets R-Squared. Group of answer choices 0.451751 is the proportion of variability of Gini Coefficient unexplained by our least squares line. 0.451751 is the proportion of variability of Years explained by our least squares line. 0.451751 is the proportion of variability of Gini Coefficient explained by our least squares lines 0.451751 is the proportion of variability of Years unexplained by our least squares line.

Answers

Answer:

0.451751 is the proportion of variability of Gini Coefficient explained by our least squares lines

Step-by-step explanation:

Given

[tex]R\ squared = 0.451751[/tex]

To predict: Gini by year

Required

Interpret the R squared

In statistics, r squared measures the extent to which the variance of one variable explains the variance of the other variable.

In this question, the variable to predict is Gini:

From the list of options, (c) is correct

Find the missing length of the triangles it’s OK if you can only do one

Answers

Answer:

5) 9

6) 11 2/3

Step-by-step explanation:

Use the Pythagorean Theorem.

5)  a²+5.6²=10.6²

a²+31.36=112.36

a²=81

a=√81

a=9

6) a²+4²=12.3333²

a²+16=152.11111

a²=152.11111-16

a²=136.1111

a=√136.1111=11.6666

A person has 10 Rap songs, 12 R&B songs, 23 Alternative songs, 10 Pop songs, 17 Country songs, and 18 Hip Hop songs stored on an MP3 player (a total of 90 songs). If the person set the MP3 player to random shuffle, what are the probabilities of the first song being played being a Country song?

A) .4888
B) .3888
C) .2888
D) .1888

Answers

D
Step-by-step explanation:
The percentage of 17 out of 90 is 18.88. When you move the decimal point over two places to make it a percentage out of one you get 0.1888

Find an equivalent ratio for the ratio 6 to 7.

42
53
13
14
54
36
49

Answers

Hi there!

Finding the equivalen ratio means to find a equivalent numbers that’s equivalent to 6 and 7 which also means a number that 6 and 7 all goes into...

6,12,18,24,30,36,42

7,14,21,28,35,42

Final Result: 42

what is 2x2x2x2+2+2+2divitide by 6

Answers

Answer:

3.6 repeating or 3 and 2/3

Step-by-step explanation:

I did the work on a calculator.

Answer:

f be it is right

Step-by-step explanation:

okay that is it

Can anybody help me with this please

Answers

I’m pretty sure that the answers

C

Problem 5

Each of the following statements regarding the transformation of the function
y=f(x)
is false.

State what is wrong in the statement and provide the correction that would make the statement true. For example, “The sun is a planet.” is a false statement. One possible correct answer is: “Mistake: The sun is not a planet. Correction: The sun is a star.”


Part a)

When graphing the function
y=f(x+3)
, all of the
x
values would be shifted to the right by 3 because the transformation is a shift right by 3 units.


Part b)

When graphing the function
y=−f(x)
, there is a reflection over the
y
-axis.


Part c)

When graphing the function
y=2f(x)
, all of the
y
values would be multiplied by
12
because the transformation is a vertical compression by a factor of 2.

Answers

Answer:

Part A

When graphing the function y = f(x+3), all of the x values would be shifted to the right by 3 because the transformation is a shift right by 3 units.

Mistake: This is not a shift rightCorrection: ... all of the x values would be shifted to the left by 3 because the transformation is a shift left by 3 unitsPart B  

When graphing the function y=−f(x), there is a reflection over the y-axis

Mistake: This is not a reflection over the y-axisCorrection: ...there is a reflection over the x-axisPart C

When graphing the function y=2f(x), all of the y-values would be multiplied by 2 because the transformation is a vertical compression by a factor of 2.

Mistake: This is not a vertical compressionCorrection: ... a horizontal compression by a factor of 2

Note: "multiplied by 12" considered as typo otherwise this is to be included as correction

Answer:

the answer is A When graphing the function

y=f(x+3)

, all of the

x

values would be shifted to the right by 3 because the transformation is a shift right by 3 units.

Are 2.r = 4 and 4x + 5 = 13 equivalent? ​

Answers

Answer:

Yes, they are equivalent.

Step-by-step explanation:

2r = 4, r = 2. We get this because 4/2 = 2.

4x+5 = 13. Subtract 5 from both sides and we'll get  4x=8. Now divide 8/4 = 2.

So we get 2 = 2, which means that the expressions are equivalent.

üç basamaklı en küçük pozitif tam sayı ile Bir basamaklı en büyük negatif tam sayının toplamı kaçtır?
A)998 B)990 C)99 D)91 ​

Answers

Üç b en büyük 100
Bir b en büyük negatif -1
100-1=99

15 POINTS!!

Graph the equation. y=2(x-4)^2+5

Answers

Answer:

Step-by-step explanation:

Answer:

It's a parabola opening up from the vertex (4,5) and intercepts the y-axis at (0,37)

Market researchers wanted to know whether the placement of a new product on a supermarket shelf significantly increases the percent of shoppers who will buy the product. At Supermarket X, a new product was placed on the top shelf, and at Supermarket Y, the product was placed one shelf below the top shelf. To observe buying habits, the researchers selected a random sample of 364 shoppers at X and another random sample of 327 shoppers at Y. Of the selected shoppers at X, 15 bought the product, and of the selected shoppers at Y, 19 bought the product. Which of the following is the most appropriate method for analyzing the results?

a. A two-sample z-test for a difference in sample proportions.
b. A two-sample z-test for a difference in population proportions
c. A one-sample z-test for a sample proportion
d. A one-sample z-test for a population proportion
e. A one-sample z-test for a difference in sample proportions

Answers

Answer:

a. A two-sample z-test for a difference in sample proportions

Step-by-step explanation:

We are told that there are two supermarkets in the research named X and Y.

That a random number of shoppers were selected in each supermarket.

Thus means we have two different sample proportion.. Since a different number of people were randomly selected from each supermarket and a different number of people purchased the product.

Thus, we will have 2 sample proportions one for supermarket X and the other for supermarket Y.

In addition, the position of the product was different in both supermarkets.

Thus, we can say that this is a 2 sample Z-test for difference in their sample proportion.

The option that is most appropriate method for analyzing the results is that a two sample z test for a difference in population proportions.

What is a two sample z-test?

A Two-Sample Z-test is known to be a kind of test that is often employed so as to make a comparison of the means of two samples to know and show if it is feasible that they are a product of the same population.

Conclusively, When a two sample z test is employed in the data given above, one can know and show the various difference that can be seen in population proportions.

Learn more about two sample z test  from

https://brainly.com/question/7191266

A universitys freshman class has 8900 students. 3471 of those students are majoring in Engineering. What percentage of the frehman class are Engineering majors?

Answers

Answer:

39%

Step-by-step explanation:

129-7+6
va dau coroana​

Answers

Answer:

The correct answer is 128

What is the square root of -24

Answers

The square root of a negative number does not exist in the set of real numbers so the answer is Undefined

what is the surface area of this cone​

Answers

Answer:

14

Step-by-step explanation:

7+9 x (3+8) Order of operations. Please explain.

Answers

Answer:

Not sure if that is "9x" or "9 times" but I will do both. I have attached a picture of me solving and explaining the steps. Hope this helps, thank you !!

NEED HELP ASAPPP please

Answers

Answer:

it might be d I am not shore but I think that one sounds the best branley is making me do this to sigh. up sorry donjot use this

HOLA! HEY!! Can some one please help me with this quiz? I will give you brainlest.
A rectangle with an area of 8 ft² is dilated by a factor of 4.

What is the area of the dilated rectangle?


12 ft²

32 ft²

64 ft²

​128 ft²

Answers

Answer:

I think the answer it is D

what is the probability that the red shows a six or the green die shows a six?

Answers

Answer:

11/36

Step-by-step explanation:

Mrs Andrew's pays $125. For a hair cut. If she gives a 25% tip, how much will she pay

Answers

Answer:

$156.25

Step-by-step explanation:

25% of 125 is 31.25. So 125+31.25 is 156.25.

Sydney bought 5 books for $79.75. If each book cost the same amount, find the price of each book.

Answers

Answer:

15.95

Step-by-step explanation:

Hope this helps

Answer:

398.75

Step-by-step explanation:

I multiplied 5 by 79.75 and got 398.75

Sorry for the blur but I need help with this one objective: find all seven angles

Answers

I know u need to add diverse then add again then u will get your answer which is 25

ANSWER ASAP I WILL GIVE BRAINLIST

Answers

Answer:

its upside down

Step-by-step explanation:

PLEASE MARK ME AS BRAINLIEST

Answer:

-2/x²-1

Step-by-step explanation:

p(x)-q(x)

(1/x+1) - (1/x-1)

(x-1)/((x+1)(x-1)) - (x+1)/((x+1)(x-1))

x-1-x-1 / x²-1

-2/x²-1

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