PROCESS A: "Driftless" geometric Brownian motion (GBM). "Driftless" means no "dt" term. So it's our familiar process: ds = o S dw with S(O) = 1. o is the volatility. PROCESS B: ds = a S2 dw for some constant a, with S(0) = 1 As we've said in class, for any process the instantaneous return is the random variable: dS/S = (S(t + dt) - S(t)/S(t) = [1] Explain why, for PROCESS A, the variance of this instantaneous return (VAR[ds/S]) is constant (per unit time). Hint: What's the variance of dw? The rest of this problem involves PROCESS B. [2] For PROCESS B, the statement in [1] is not true. Explain why PROCESS B's variance of the instantaneous return (per unit time) depends on the value s(t).

Answers

Answer 1

In Process A, which is a driftless geometric Brownian motion, the variance of the instantaneous return (VAR[ds/S]) is constant per unit time. However, in Process B, where ds = aS^2dw, the variance of the instantaneous return depends on the value of S(t).

In Process A, since there is no drift term (dt), the random variable dw follows a standard normal distribution with a constant variance of dt. When calculating the instantaneous return dS/S, we can see that the dt terms cancel out, resulting in a constant variance of the instantaneous return (VAR[ds/S]) per unit time. This is because the volatility o remains constant, and the random variable dw has a constant variance.  

In Process B, the equation ds = aS^2dw suggests that the variance of the instantaneous return is proportional to the value of S(t). As S(t) increases, the magnitude of ds also increases, leading to a larger variance of the instantaneous return. In other words, the volatility in Process B depends on the level of the underlying process S(t). This is different from Process A, where the variance of the instantaneous return is constant regardless of the value of S(t). Hence, the variance of the instantaneous return in Process B is not constant per unit time, but rather dependent on the value of S(t).

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Related Questions

HELP I NEED HELP ASAP
HELP I NEED HELP ASAP HELP I NEED HELP ASAP
HELP I NEED HELP ASAP HELP I NEED HELP ASAP
HELP I NEED HELP ASAP

Answers

Answer:

A) (2,5)

Step-by-step explanation:

longest side is between points (1,4) and (3,6)

so midpoint is ((1+3)/2), ((4+6)/2), which equals (2, 5)

A car dealership offers two types of discounts.
• Discount 1: Take 5% off the original price of a car built last year and then receive a
$3,500 rebate.
• Discount 2: Take 10% off the original price of a car built this year and then receive a
$1,250 rebate.
A customer is deciding between two cars.
• Car R was built last year and has an original price of $25,340.
• Car S was built this year and has an original price of $22,860.
Based on this information, which statement is true?
A The customer would pay $19,324 for Car S.
B The customer would pay $24,073 for Car R.
C The customer would pay $21,824 for Car S.
D The customer would pay $23,107 for Car R.

Answers

The best answer to go with is b

Answer:

The customer would pay $19,324 for Car S.

Step-by-step explanation:

Take Car S

$22,860 x .1 (ten percent) = $2,286

$22,860 (original car price) - $2,286 (minus the 10%) = $20,574 (new car price)

$20,574 - rebate of $1,250 = $19,324

The customer would pay $19,324 for Car S.

All other do not come out but this one does, so that is the only option for this!

Solve the equation −6 +x/4 = −5
Pls help

Answers

Answer:

x=4

Step-by-step explanation:

Answer:

x = 4

Step-by-step explanation:

-6 + x/4 = -5

-6+6 + x/4 = -5+6

x/4 = 1

x/4 *4 = 1*4

x = 4

hope this helped :)

You put the names of all the students in your class in a paper bag. There are 14 boys and 20 girls. If you draw a name at random, what is P(boy’s name)?

Answers

Answer:

7/17

Step-by-step explanation:

you add the number of students which is 34. Then you take the number of boys and put it over 34 which would be 14/34. when you reduce it the answer will be 7/17.

let me know if this helps!

the area of a rhombus is 24 square inches. What is the are of a similar rhombus that is 7 times as big?

Answers

Answer: 1176

Step-by-step explanation: 7 times as big is an ambiguous term; it could mean that each side is 7 times larger, or that the shape as a whole is made 7 times larger. We'll assume that each side is made larger, because that is typically the type of question asked. The area is given as base times height, and obviously, if you dilate the non-base side by 7, the height will also become 7, because those two lines from a triangle with the third side being the base extended. I wish I could draw you a diagram but i can;t. Either way, think of it as a square, and if we dilate each side by 7, then we have lx7xwx7=Area, which is lw*49=49 times the given area, which is 24; 24*49=1176

What is the area of this shape can someone please help

Answers

Answer 10x8=80+3

Step-by-step explanation:

i.d.k 83?????

plssss help

use the property that it says to solve the proportion ty​

Answers

Answer:

the answer is 45 over 6

Step-by-step explanation:

A shortcut is "2 x _____ is 6", which is 3.

Multiply 15 by 3 also, to get 45,

45/6

-2( 3x - 1) = -6x - 1

Answers

Answer:

Yes, that equation is right

Step-by-step explanation:

I don’t know why this is a question, however

Answer:

0 = -3

Step-by-step explanation:

Distribution

− 2 ( 3 − 1 ) = − 6 − 1

− 6 + 2 = − 6 − 1

Subraction (2 from both sides)

− 6 + 2 = − 6 − 1

− 6 + 2 − 2 = − 6 − 1 − 2

Simplify

− 6 = − 6 − 3

Add 6 to both sides

− 6 +6 = − 6 − 3+6

Combine like terms

− 6 +6 = − 6 − 3+6

0=-(6)-3+(6)

0=-3

ill put this up for 50 just please someone help me.

Answers

Answer:

1) Let the dimensions be x for greater size and 1 for unit size

Product is:

x² + 3x + 2x + 6 = x² + 5x + 6

Factors are:

(x + 3) and (x + 2)

2)

Product is:

2x² + 3x + 2x + 3 = 2x² + 5x + 3

Factors are:

(2x + 3) and (x + 1)

HA
2
-X
- 2
2
-2
-4
A.
ys1
B.
1 sys 6
Oc.
y21
D.
all real numbers

Answers

Answer:

Can you please explain this question more thoroughly?

Step-by-step explanation:

it is difficult to understand

The simplified expression is 4x - 23.

Option A is the correct answer.

We have,

To simplify the expression 3(2x - 5) - 2(x + 4), we need to apply the distributive property and combine like terms.

First, distribute the 3 to the terms inside the parentheses:

3 * 2x = 6x

3 * (-5) = -15

Next, distribute the -2 to the terms inside the parentheses:

-2 * x = -2x

-2 * 4 = -8

Now, let's simplify the expression by combining like terms:

6x - 15 - 2x - 8

Combine the x terms: 6x - 2x = 4x

Combine the constant terms: -15 - 8 = -23

Thus,

The simplified expression is 4x - 23.

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The complete question:

Simplify the expression 3(2x - 5) - 2(x + 4).

A. 4x - 23

B. 4x - 7

C. 4x + 13

D. 4x + 7

Find the value of x that makes the quadrilateral a parallelogram.
6x
3x + 2
X=

Answers

Answer:

15

Step-by-step explanation: simple math

Answer:

2/3

Step-by-step explanation:

6x = 3x+2

3x = 2

x = 2/3

Aliyah spent half of her weekly allowance playing arcade games. To earn more money her parents let her mow the lawn for $7. What is her weekly allowance (W) if she ended up with $16? The variable should always go in the first term

Answers

Answer:

who mows the lawn for 7 dollars :/

Step-by-step explanation:

Please help I'm begging a ACE OR GENES To help me please please help please please ASAP please please help please please ASAP please please help

Answers

Answer:

3/2

Step-by-step explanation:

WX/AB = 12/8 = 3/2

Answer: 3/2








1. Write the following function using unit step functions and then find its Laplace transform: 0

Answers

The Laplace transformation in the given function is = 5 - 8e⁻⁷ˣ/ x

Rewrite f in terms of the unit step function:

f(t) = { y = 5 for 0 ≤ t ≤ 7

    = { x = - 3 t > 7

f(t) = 5{u(t) -u(t -7) - 3u (t -7)}

     = 5u(t) - 8u (t-7)

Recall the time-shifting property of the Laplace transform:

L I u(t - c)f(t -c) I

= e⁻ᵃˣ L[f(t)]

and the Laplace transform of a constant function,

L(K) = k/a

So we have

L{f(t)} = 5u(t) - 8u (t-7)

       = 5 L[1] - 8e⁻⁷ˣ

       = 5 - 8e⁻⁷ˣ/ x

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The given question is incomplete, the complete question is below

Write the following function using unit step functions and then find its Laplace transform:

f(t) = { y = 5 for 0 ≤ t ≤ 7

    = { x = - 3 t > 7

Let T be a linear transformation from P2 to R², defined by T(p) = [p(0) p(1)] polynomial p(t) in P2. Find bases for kernel of T and range of T.

Answers

For the linear transformation we have:

Basis for the kernel of T (Ker(T)): {[t² - t]}

Basis for the range of T (Range(T)): {[1, 1], [1, 0], [0, 1]}

How to find the bases for kernel of T and range of T?

To find the bases for the kernel and range of the linear transformation T: P2 -> R², defined by T(p) = [p(0), p(1)], we need to understand the properties of T and solve for the appropriate vectors.

Kernel of T (Nullspace):

The kernel of T, denoted as Ker(T), consists of all polynomials p in P2 such that T(p) = [p(0), p(1)] = [0, 0]. In other words, the kernel contains all polynomials that get mapped to the zero vector in R².

Let's solve for the kernel by setting up the system of equations:

p(0) = 0

p(1) = 0

Since we are dealing with polynomials of degree at most 2, let's consider a general polynomial p(t) = at² + bt + c.

Substituting into the equations:

(0)a + (0)b + c = 0 -> c = 0

(1)a + (1)b + c = 0 -> a + b = 0 -> b = -a

Thus, any polynomial of the form p(t) = at² - at, where a is a scalar, will be in the kernel of T. Therefore, a basis for the kernel is [t² - t].

Range of T:

The range of T, denoted as Range(T), consists of all vectors in R² that can be obtained by applying the linear transformation T to some polynomial in P2.

To find the range, we need to determine all possible outputs of T(p) for polynomials p in P2.

Let's consider a general polynomial p(t) = at² + bt + c and apply T(p):

T(p) = [p(0), p(1)] = [a(0)² + b(0) + c, a(1)² + b(1) + c] = [c, a + b + c]

So, any vector [x, y] in the range of T must satisfy x = c and y = a + b + c for some a, b, c.

In R², any vector [x, y] can be written as [x, y] = [c, a + b + c] = c[1, 1] + a[1, 0] + b[0, 1], where a, b, c are scalars.

So, the basis for the range of T is {[1, 1], [1, 0], [0, 1]}.

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What is the main cause of tides?

A.
Earth's gravitational pull

B.
the moon's gravitational pull

C.
the moon's rotation around its axis

D.
Earth's revolution around the sun

Answers

I'm not exactly sure on this one but please bare with me haha

High tides and low tides are caused by the moon and tides are really all about gravity(hence why all of these answers have gravitational in them). And, when we are talking about "daily tides" it's the moon that causes them.

The moon's gravity draws in various areas of our world as it rotates. Since the moon is just 1/100th the mass of the Earth, it has enough gravity to shift objects about. The ocean on the moon's far side is still trying to bulge out against it. A high tide is what we term this bulge. (Water is easy to move around too)

This is tidal force, and there are differences between high tides and low tides.
Hello, the answer is:-

The main cause of tides is the moon's gravitational pull.

Hope it helps you...

Answered by Benjemin ☺️


In the experiment of throwing a dice and flipping a coin,
given:
A: getting a number less than 4
B: getting T on a coin

Answers

The probabilities of:

A: Getting a number less than 4 on the dice is 1/2

B: Getting tails (T) on the coin is 1/2

In the experiment of throwing a die and flipping a coin, let's define the following events:

A: Getting a number less than 4 on the dice (possible outcomes: 1, 2, 3).

B: Getting tails (T) on the coin.

To determine the probabilities of these events, we need to consider the number of favorable outcomes and the total number of possible outcomes.

For event A:

Number of favorable outcomes: 3 (numbers 1, 2, 3)

Total number of possible outcomes on the dice: 6 (numbers 1 to 6)

So, P(A) = favorable outcomes / total outcomes = 3/6 = 1/2

For event B:

Number of favorable outcomes: 1 (tails T)

Total number of possible outcomes on the coin: 2 (heads H, tails T)

So, P(B) = favorable outcomes / total outcomes = 1/2

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PLEASE HELP!!!! Jul is using the graph of an exponential function to represent the value of an investment where x is the number of years Jul has owned the investment. Which statement correctly describes a key feature of the function?

Answers

Answer: the answer is D

Step-by-step explanation:

Trust me

the domain of the function is x greater than equal to 0.

Answer: The domain of the function is x>0. So D just took the test, got it right!

Step-by-step explanation:

Test for a significant change in the attitude toward increased federal funding for stem cell research, as measured on an ordinal scale survey, before and after 22 people hear a discussion of the issue on a network news program.

Answers

The steps to test for a significant change in the attitude toward increased federal funding for stem cell research.

As measured on an ordinal scale survey, before and after 22 people hear a discussion of the issue on a network news program are as follows:

Step 1: State the null and alternative hypotheses

In this case, the null hypothesis states that there is no significant change in attitude towards increased federal funding for stem cell research before and after 22 people hear a discussion of the issue on a network news program. The alternative hypothesis states that there is a significant change in attitude towards increased federal funding for stem cell research before and after 22 people hear a discussion of the issue on a network news program.

Step 2: Set the level of significance

The level of significance, denoted by alpha, is the probability of rejecting the null hypothesis when it is true. A common level of significance is 0.05. This means that there is a 5% chance of rejecting the null hypothesis when it is true.

Step 3: Calculate the test statistic

To calculate the test statistic, we can use the Wilcoxon signed-rank test. This test compares the scores before and after the treatment and calculates the difference between them. The Wilcoxon signed-rank test is used for paired samples or repeated measures. It is a nonparametric test and is used when the data is not normally distributed or when the data is ordinal.

Step 4: Determine the critical value

To determine the critical value, we need to look up the value in the Wilcoxon signed-rank table. The critical value is the smallest value that would lead to the rejection of the null hypothesis.

Step 5: Compare the test statistic to the critical value

If the test statistic is greater than the critical value, we reject the null hypothesis. If the test statistic is less than the critical value, we fail to reject the null hypothesis.

Step 6: Interpret the results

If we reject the null hypothesis, we can conclude that there is a significant change in attitude towards increased federal funding for stem cell research before and after 22 people hear a discussion of the issue on a network news program. If we fail to reject the null hypothesis, we cannot conclude that there is a significant change in attitude towards increased federal funding for stem cell research before and after 22 people hear a discussion of the issue on a network news program.

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The ordinal scale survey is the type of scale utilized for the measurement of attitude, and it is used to rank the participant's responses on an order (ordinal) from smallest to greatest.

The survey measured the attitude toward increased federal funding for stem cell research, and it was conducted on 22 people before and after a discussion on the issue on a network news program.

A statistical analysis of the survey responses can be conducted using the Wilcoxon Signed Rank Test to test for a significant change in attitude.

The Wilcoxon Signed Rank Test is an ideal nonparametric test that tests for changes in attitudes before and after a discussion on the issue on a network news program.

The Wilcoxon Signed Rank Test compares the scores of each participant's responses on the ordinal scale before and after the discussion.

After computing the differences between the scores, the test ranks the differences, and then the sum of the positive and negative ranks is calculated.

The calculated sum is then compared with the Wilcoxon Signed Rank Test critical values, which depend on the number of pairs tested, which in this case, is 22.

If the calculated sum is higher than the critical value, then there is a significant change in attitude towards increased federal funding for stem cell research after the discussion on the network news program.

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Two angles in a triangle have measures of 18 and 77º.
What is the measure of the third angle

Answers

Answer:

85 ° is the answer to the question

Answer:

85 degrees

Step-by-step explanation:

Angles in a triangle add up to 180 in total so to solve it add the two angles you know so 18+77 which is 95 than you subtract it from 180 so 180 - 95 is 85

match each correlation to the corresponding scatterplot. 13. true or false: r = 0.49 → (2) 14. true or false: r = −0.48 → (2) 15. true or false: r = −0.03 → (4) 16. true or false: r = −0.85 → (1)

Answers

Based on the given statistics, we will shape each correlation to the corresponding scatterplot as follows:

13.True or False: r = 0.49 → (2)

14.True or False: r = -0.48 → (4)

15.True or False: r = -0.03 → (3)

16.True or False: r = -0.85 → (1)

Based on the given records, we need to match each correlation fee to the corresponding scatterplot. Let's analyze every correlation and its corresponding scatterplot in more detail:

13.True or False: r = 0.49 → (2)

A correlation coefficient of 0.49 shows a tremendous correlation among the variables. This means that as one variable will increase, the alternative variable tends to grow as nicely, albeit not flawlessly. In the scatterplot categorized as (2), we'd assume to look at a trendy upward fashion wherein the factors are quite scattered around the road of satisfactory fit.

14.True or False: r = -0.48 → (2)

A correlation coefficient of -0.48 indicates a bad correlation between the variables. This manner that as one variable increases, the opposite variable has a tendency to lower. In the scatterplot labeled as (2), we'd expect to see a standard downward fashion wherein the points are rather scattered around the line of fine match.

15.True or False: r = -0.03 → (4)

A correlation coefficient of -0.03 shows a very weak terrible correlation between the variables. This method that there is almost no relationship between the variables. In the scatterplot categorized as (four), we would count on seeing factors scattered randomly, with no discernible pattern or fashion.

16. True or False: r = -0.85 → (1)

A correlation coefficient of -0.85 shows a sturdy poor correlation between the variables. This method that as one variable increases, the other variable has a tendency to decrease substantially. In the scatterplot labeled as (1), we might count on to peer a clear downward trend in which the factors are tightly clustered around the road of the first-rate match.

By analyzing the strengths and instructions of the correlations, we can suit each correlation value to its corresponding scatterplot as follows:

13. True or False: r = 0.49 → (2)

14.True or False: r = -0.48 → (2)

15.True or False: r = -0.03 → (4)

16.True or False: r = -0.85 → (1)

Please notice that scatterplots provide visible representations of statistics and relationships between variables, and the interpretations might also vary relying on the context and the statistics being analyzed.

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You are interested in estimating the thic THCurwis of the local adult population of female white-tailed deer (doe). From past data, you estimate that the standard deviation of all adult female white-tailed deer in this region to be 18 pounds. What sample size would you need to in order to estimate the mean weight of all female white-tailed deer, with a 90% confidence level, to within 5 pounds of the actual weight?

Answers

The sample size required to estimate the mean weight of all female white-tailed deer with a 90% confidence level within 5 pounds of the actual weight is 43.

In order to estimate the sample size required to estimate the mean weight of all female white-tailed deer with a 90% confidence level within 5 pounds of the actual weight, the following steps are to be followed:

Step 1: Determine the confidence level and the maximum allowable error

The given confidence level is 90%.

The maximum allowable error is 5 pounds.

Step 2: Determine the population standard deviationThe population standard deviation is given as σ = 18 pounds.

Step 3: Determine the critical value

The critical value corresponding to a 90% confidence level is 1.645.

Step 4: Calculate the sample size formula to calculate the sample size is given as

n = [(z-value)² × σ²] / E² Where n = sample size

z-value = critical value

σ = population standard deviation = maximum allowable error

Substituting the given values in the above formula, we get,n = [(1.645)² × (18)²] / (5)²= 42.68≈43 (approx)

Therefore, the sample size required to estimate the mean weight of all female white-tailed deer with a 90% confidence level within 5 pounds of the actual weight is 43. Answer: 43

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The equation for a parabola has the form y=az? + bz +c, where a, b, and care constants and a 70. Find an equation for the parabola that passes through the points (-1,0), (1,6), and (-3,-14). Answer: y = __

Answers

The equation for the parabola that passes through the points (-1,0), (1,6), and (-3,-14) is y = -2x² + 3x + 1.

To find the equation of a parabola, we need to substitute the given points into the general form of the equation, y = az² + bz + c, and solve for the unknown constants a, b, and c. In this case, we have three points: (-1,0), (1,6), and (-3,-14). We can plug in the x and y values of each point into the equation to obtain three equations.

For the point (-1,0):

0 = a(-1)² + b(-1) + c

For the point (1,6):

6 = a(1)² + b(1) + c

For the point (-3,-14):

-14 = a(-3)² + b(-3) + c

Now we have a system of three equations with three unknowns (a, b, and c). Solving this system will give us the values of a, b, and c, which we can then substitute back into the general equation to obtain the specific equation of the parabola.

To solve the system, we can use various methods such as substitution, elimination, or matrices. However, to keep the explanation concise, I'll provide the solution directly.

Solving the system of equations, we find:

a = -2b = 3c = 1

Substituting these values back into the general equation, we get:

y = -2x² + 3x + 1

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The sum of the first nine terms in a sequence is 49,205. Each term is 3 times the previous term. What is the third term?

Answers

Answer:

       a₃ = 32 805

Step-by-step explanation:

Each term is 3 times the previous term:  

                                                                r = 3

The sum of the first nine terms in a sequence is 49,205:

                                                      [tex]S_n=a_1\cdot\dfrac{1-q^n}{1-q}\\\\\\49205=a_1\cdot\dfrac{1-3^9}{1-3}\\\\49205=a_1\cdot\dfrac{1-19683}{-2}\\\\49205=a_1\cdot9841\\\\a_1=5[/tex]

What is the third term?

                                     [tex]a_n=a_1\cdot q^{n-1}\\\\a_3=5\cdot3^8=32805[/tex]

Please help meee! I will give brainleiest!

Answers

Answer:

64? I'm not sure but because if 1= girls (8 girls) and boys is 8 times more you do 8x8 I think sorry if I'm wrong

Answer:

There are 64 boys

Step-by-step explanation:

If there are 8 girls it would be 8*1

so you would have to multiply 8 by the ratio of boys which is 8*8

which equals 64 boys to 8 girls (8:1)

Your welcome

Solve the differential equation
dR/dx=a(R²+16)
Assume a is a non-zero constant, and use C for any constant of integration that you may have in your answer.
R = ?
If anyone helps me, I will give away points.

Answers

the given differential equation dR/dx = a(R² + 16), where a is a non-zero constant, is R = -4/√[tex](16 - e^(2ax + C))[/tex], where C is the constant of integration.

In the first part, the solution to the differential equation is R = -4/√[tex](16 - e^(2ax + C)).[/tex]

In the second part, let's solve the differential equation step by step. We start by separating variables:

dR/(R² + 16) = a dx.

Next, we integrate both sides:

∫(1/(R² + 16)) dR = ∫a dx.

To integrate the left side, we can use a substitution. Let u = R² + 16, then du = 2R dR. This gives us:

(1/2) ∫(1/u) du = ∫a dx.

Simplifying the left side and integrating, we have:

(1/2) ln|u| = ax + C.

Substituting back for u and rearranging, we get:

ln|R² + 16| = 2ax + 2C.

Taking the exponential of both sides, we have:

|R² + 16| = [tex]e^(2ax + 2C).[/tex]

Considering the absolute value, we can rewrite it as:

R² + 16 = [tex]e^(2ax + 2C).[/tex]

Solving for R, we get:

R = ±√(e^(2ax + 2C) - 16).

Simplifying further:

R = ±√(e^(2ax + C) - 16).

Finally, we can rewrite it as:

R = -4/√(16 - e^(2ax + C)).

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Enter values to complete the table below.

PLEASE HELP, DUE IN ONE HOUR AND HAVE LOTS TO DO.
20 POINTS!!

Answers

Answer:

6, 0, 2

Step-by-step explanation:

Divide y by x.

Answer:
6
0
2


If this helped please mark brainliest :)

At a hospital emergency room, a doctor has determined that for every 14
patients injured in a car accident, 6 were not wearing seat belts.
6 no seat belts
14 injured total
If the emergency room saw 420 patients injured in car accidents last
month, what is the best prediction for how many patients were not wearing
seat belts? Round to the nearest WHOLE person.

6 no seat belts = ? no seat belts
___________ ___________
14 injured total 412 injured total​

Answers

Answer:

A prediction of 177 people.

Step-by-step explanation:

6x412=2472

2472/14=176.571428571

Rounded to nearest whole person=177

Please mark me as brainliest.

What is the slope of the line that passes through the
points (4,-7) and (9, 1)?
A) 5/8
B) 8/5
C) -6/12
D)-13/6

Answers

Answer:

C) -6/12

Step-by-step explanation:

Sana nakatulong

martin has read ​20% of a book. He has 8 more pages to finish. How many pages are there in the​ book?

Answers

Answer:

10 pages are in the page if im correct

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