Systematic sampling is a random sampling technique which is frequently chosen by researchers for its simplicity and its periodic quality.
In systematic random sampling, the researcher first randomly picks the first item or subject from the population. The
Terms for the Fourth Exam
forward, option, swap, diversifiable risk, ask/bid prices, short sale, expiry, spot
price, payoff (inherent value), profit, long position, short position, cash settlement,
call option, put option, strike price, option writer, pre
Systematic sampling is a random sampling technique which is frequently chosen by researchers for its simplicity and its periodic quality.
In systematic random sampling, the researcher first randomly picks the first item or subject from the population. The
The Theory of Interest - Solutions Manual
Chapter 6
1. (a) P = 1000 ( 1.10 ) 10 = $385.54 . (b) P = 1000 ( 1.09 ) 10 = $422.41 . (c) The price increase percentage is
422.41 385.54 = .0956, or 9.56%. 385.54
2. The price is the present value of the accumula
1
#1 (a):
Buy call at K = 10
Sell call at K = 15
Buy call at K = 18
Sell 3 calls at K = 23
Buy 2 calls at K = 28
#1 (b):
We lose C (10) = 2 buying a call at K = 10
We gain C (15) = 2.5 writing a call at K = 15
We lose C (18) = 2.8 buying a call at
The Theory of Interest - Solutions Manual
Chapter 3
1. The equation of value using a comparison date at time t = 20 is 50, 000 = 1000 s20 + Xs10 at 7%. Thus, 50,000 1000 s20 50,000 40,995.49 X= = = $651.72. s10 13.81645 2. The down payment (D) plus the am
The Theory of Interest - Solutions Manual
Chapter 2
1. The quarterly interest rate is i 4 .06 = = .015 4 4 and all time periods are measured in quarters. Using the end of the third year as the comparison date 12 3000 ( 1 + j ) + X = 2000v 4 + 5000v 28 X =
The Theory of Interest - Solutions Manual
Chapter 1
1. (a) Applying formula (1.1) A ( t ) = t 2 + 2t + 3 so that a( t) = and A ( 0 ) = 3
A( t ) A( t ) 1 ( 2 = = t + 2t + 3) . k A ( 0) 3
(b) The three properties are listed on p. 2. (1) 1 a ( 0 ) = ( 3) = 1