Question 3

Explain why an option’s time value is greatest when the stock price is near the exercise price and why it nearly disappears when the option is deep-in- or out-of- the-money. (5Marks)

Callpricesaredirectlyrelatedtothestock’svolatility,yethighervolatilitymeansthat
the stock price can go lower. How would you resolve this apparent paradox?

3. Pens are normal goods. What will happen to the equilibrium price of pens if the prices of pencils rises, consumers experience an increase in income, writing in ink becomes fashionable, people expect the price of pens to rise in the near future, the population increases, fewer firms manufacture pens, and the wages of pen-makers increase?

For the following situations, choose a modeling method and explain why you would use it.
a. Designing a prosthetic limb

b. Routing a piping system for a building

c. Designing a one-of-a-kind machined part

d. Verifying clearances for an electrical substation located near an airfield

e. Mapping an oil reservoir

Given the current situation, many firms were forced to shut down in the short-run. However, it is being assumed that many will reopen and go back to business in the near future. Look at a specific firm or industry and discuss the decision these firms need to make and how you believe conditions will impact these decisions.

An engraver uses a magnifying glass (f = 7.20 cm) to examine some work, as in the drawing. The image he sees is located 28.0 cm from his eye, which is his near point. (a) What is the distance between the work and the magnifying glass? (b) What is the angular magnification of the magnifying glass?

•As the world is getting more and more connected, will the world become uni-cultural in the near future? Which are the homogenizing and which the hydrogenizing forces in general? And in your home country Finland? How do you see the relation of culture and globalization in light of the recent pandemic (incl. how countries are (re)acting)?

Flexural strength design check of sections of a typical internal portal frame:

The load cases which you are expected to analyse for portal frame in this exercise, and from which the design bending moments and the coincident axial forces required for this section should be derived, are discussed in the ‘Supplementary Notes’. The moment capacities Msx and Mbx and the axial capacities Ns, Ncx and Ncy may be determined using the tables in the AISC ‘Design Capacity Tables for Structural Steel’ publication.

Rafters:
Check the flexural strength of the rafters in a typical internal portal frame, in the general vicinity of the ridge. Again, check for the two cases of maximum sagging B.M. at or near the ridge and maximum hogging B.M. at or near the ridge, and allow for the coincident axial force. Again, note that:
 The purlins in the roof are at 1250mm centres, generally.
 Assume there is fly bracing at the ridge and then at 4 spaces from the ridge (obtain value depending on frame geometry).
For the rafters assume Grade 300 steel.

Retrograde motion of superior planet always occurs when the planet is a) in conjunction with the moon b)brighter than average c)near the autumnal equinox d) near a solstice e) dimmer than average 2) The moon a) spins once on its axis relative to the sun every 23 hours 56 mins. b) spins once on it axis relative to the sun every 24 hours c) spins once on its axis relative to the sun every 29.5 days d) spins once on its axis relative to the sun every 365 days e)never spins on its axis 3) The planets a) move faster in their orbit around the sun in km/s, the closer they are to the sun b) are always located at the same right ascension and declination in the sky c) are always found along the celestial equator d) are always located at declinations greater than 60 degrees e) are always observed along the meridian

A study was conducted to investigate the hypothesis that living within 100 meters of a large highway increased the risk of childhood respiratory illness. The investigators recruited 200 children ages 6 to 10 years old living near highways and another 200 children of similar age, gender and ethnicity living more than 100 meters from highways. They followed the children for 3 months and asked the parents to record in a daily diary any symptoms of respiratory illness. At the end of the 3 months, 36 of the 200 “exposed” children (living near a highway) had developed at least one respiratory illness, while 17 of the 200 living further away had developed respiratory illness. a. What kind of study was this? b. What measure of disease frequency can be calculated? Calculate it for each group and interpret the results. c. What measure of association can be calculated? Calculate it and interpret the results.

An article contained the following observations on degree of polymerization for paper specimens for which viscosity times concentration fell in a certain middle range:

(a) Construct a boxplot of the data.

Comment on any interesting features. (Select all that apply.)

The data appears to be centered near 428.There are no outliers.The data appears to be centered near 438.There is one outlier.There is little or no skew.The data is strongly skewed.

(b) Is it plausible that the given sample observations were selected from a normal distribution?

YesNo    

(c) Calculate a two-sided 95% confidence interval for true average degree of polymerization. (Round your answers to two decimal places.)

  ,

Does the interval suggest that 443 is a plausible value for true average degree of polymerization?

YesNo    

Does the interval suggest that 450 is a plausible value?

YesNo