There are two periods: 0 and 1. A newly formed company wants to invest in an apple tree, which producesapples only at period 1. There are three states at period 1: good, fair and bad and the tree produces 60, 30and 20 apples in these states, respectively. The company decides to issue one bond to finance the purchaseof the tree and promises to pay the bondholder 13 apples regardless of the realized state. To raise additionalfunds, the company also issues one stock. How many apples will the stock pay in the good state?

Answered: Image /qna-images/answer/2b9ea3a2-d532-40a5-ac11-27c455555320.jpg

Answered: There are two periods: 0 and 1. A newly…

Advanced Engineering Mathematics

10th Edition

ISBN:9780470458365

Author:Erwin Kreyszig

Publisher:Erwin Kreyszig

Chapter2: Second-order Linear Odes

Section: Chapter Questions

Problem 1RQ

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Consider the following bargaining problem: Two siblings Naa and Nii have to have Gh20 million they inherited from their parents between them. Naa gets to make an initial offer. Nii then gets to respond by either accepting Naa's initial offer or offering a counter offer. Finally, Naa can respond by either accepting Nii's offer or making a final offer. If Nii does not accept Naa's final offer both Nii and Naa get nothing. Nii discounts the future at 10% (i.e., future earnings are with 10% less than current earnings) while Naa discounts the future at 20%. Calculate the Nash equilibrium of this bargaining problem.
The product team of KAF Takaful Berhad is proposing to introduce a service-basedP2P micro takaful plan for a $10,000 death benefit (khairat). Each participant whosubscribes to this plan will pay an advance contribution of which 20% will be paidto KAF as an administration fee. The remaining amount will then be channelled tothe participant’s mutual account. If any death occurs the khairat benefit will be paidequally by existing participants through deductions from their mutual account. Howwould you appraise this proposal from a Shariah point of view?
Can you please show the work on a piece of paper
28. Suppose an investor has the opportunity to buy thefollowing contract (a stock call option) on March 1.The contract allows him to buy 100 shares of ABCstock at the end of March, April, or May at a guaranteed price of $50 per share. He can exercise thisoption at most once. For example, if he purchases the stock at the end of March, he cannot purchasemore in April or May at the guaranteed price. If theinvestor buys the contract, he is hoping that the stockprice will go up. The reasoning is that if he buys thecontract, the price goes up to $51, and he buys thestock (that is, he exercises his option) for $50, he canthen sell the stock for $51 and make a profit of $1per share. Of course, if the stock price goes down, hedoesn’t have to exercise his option; he can just throwthe contract away.Assume that the stock price change each monthis normally distributed with mean 0 and standarddeviation 2. The investor uses the following strategy. At the end of March, he exercises the optiononly if…
The chief loan officer of La Crosse Home Mortgage Company summarized the housing loans extended by the company in 2017 according to type and term of the loan. Her list shows that 70% of the loans were fixed-rate mortgages (F), 20% were adjustable-rate mortgages (A), and 10% belong to some other category (0) (mostly second trust-deed loans and home equity loans). Of the fixed-rate mortgages, 80% were 30-year loans and 20% were 15-year loans; of the adjustable-rate mortgages, 30% were 30-year loans and 70% were 15-year loans; finally, of the other loans extended, 30% were 20-year loans, 60% were 10-year loans, and 10% were for a term of 5 years or less. (a) Draw a tree diagram representing these data. 20 s 5 10 <=5 15 30 30 30 20 ca5 15 (b) What is the probability that a home loan extended by La Crosse has an adjustable rate and is for a term of 15 years? (c) What is the probability that a home loan extended by La Crosse is for a term of 15 years?
Suppose that the four inspectors at a film factory are supposed to stamp the expiration date on each package of film at the end of the assembly line. John, who stamps 20% of the packages, fails to stamp the expiration date once in every 200 packages; Tom, who stamps 60% of the packages, fails to stamp the expiration date once in every 100 packages; Jeff, who stamps 15% of the packages, fails to stamp the expiration date once in every 90 packages; and Pat, who stamps 5% of the packages, fails to stamp the expiration date once in every 200 packages. If a customer complains that her package of film does not show the expiration date, what is the probability that it was inspected by John?
RunHeavy Corporation (RHC) is a corporation that manages a local band. It had the following activities during its first month. RHC was formed with an investment of $11,900 cash, paid in by the leader of the band on January 3 in exchange for common stock. On January 4, RHC purchased music equipment by paying $2,300 cash and signing an $9,600 promissory note payable in three years. On January 5, RHC booked the band for six concert events, at a price of $2,800 each, but no cash was collected yet. Of the six events, four were completed between January 10 and 20. On January 22, cash was collected for three of the four events. The other two bookings were for February concerts, but on January 24, RHC collected half of the $2,800 fee for one of them. On January 27, RHC paid $3,440 cash for the band’s travel-related costs. On January 28, RHC paid its band members a total of $2,490 cash for salaries and wages for the first three events. As of January 31, the band members hadn’t yet been paid…
Brenda's bank offers car financing for 3,4,or 5 years. If Brenda chooses 5 year financing, how many monthly payments will she have?
10. Suppose a will decreed that three siblings will each receive a cash inheritance according to the following: The eldest receives 3 times as much as the youngest, and twice as much as the middle sibling. Answer the following. a. If the youngest sibling receives x dollars, how much do the other two receive? b. If the middle sibling receives y dollars, how much do the other two receive? c. If the oldest sibling receives z dollars, how much do the other two receive?
On the second week of face-to-face classes, your good friend ? borrowed from you P20.00. On the third week of face-to-face, ? borrowed again in the amount of P30.00 but returned the P20.00 a day after. On the fourth week ? borrowed again P40.00 and once again returned P30.00 a day after. On the fifth week, ? did the same by borrowing P50.00 and returned P40.00 a day after. If ? continues to do this thing this coming week, the 6 th week of face-to-face classes, how much will ? owe you? How much will ? owe you on the 9th week.
12) Thirty six percent of all assembly line mechanical robots are claimed for services by the technicians to be sent out to the manufacturer all under the issued warranty at the time of purchase. Out of these robots sent under warranty, 45% will be repaired and sent back to the factory and 55% will be replaced under warranty at no cost. Suppose the company you are working for recently ordered 15 of these mechanical robots. The CEO agreed to sign a five years purchasing contract if only the probability of sending back three of these robots are LESS than 0.24 during the life of the contract. Will she approve the purchasing contact? [Hint: you are trying to find the probability of exactly three robots will eventually be replaced under warranty as she will not sign off if such probability for three is more than 24%.]
A rent-to-own agreement allows the renter to either return the merchandise after a specified period of time or apply the monthly payments toward purchasing the item(s) (or clearly, the renter could default on the agreement). A rent-to-own company reports that nationally 60% of the agreements result in the merchandise being returned, 27% of the agreements result in the merchandise being purchased, and the remaining agreements are defaulted on (consumer does not make required payments specified in the contract). At a local rent-to-own company, a sample of 229 agreements finds that 110 result in the merchandise being returned, 74 agreements result in the merchandise being purchased and the remaining agreements are defaulted upon. When testing (at the 5% level of significance) whether the proportions of the local company are different than the proportions nationally, what is the test statistic (please round your answer to 3 decimal places)

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