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How does a market-maker decide the edge (offset) required to perform an options trade? Explain why this edge would be different for options of different strikes as well as for option combinations?
Statistics and Probability, Statistics
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Suppose that X1, · · · .Xn are normal with mean µ1; Y1, · · · , Yn are normal with mean µ2, and W1, · · · , Wn are normal with mean µ1 + µ2. Assuming that all 3n random variables are independent with a common variance, f ...
A bottle of water is supposed to have 12 ounces. The bottling company has determined that 98% of bottles have the correct amount. Which of the following describes a binomial experiment that would determine the probabilit ...
Most analysts focus on the cost of tuition as the way to measure the cost of a college education. But incidentals, such as textbook costs, are rarely considered. A researcher at Drummand University wishes to estimate the ...
Suppose that, for a given patient, the true EF is 63. Consider the population of EF values that can be estimated on that patient using option II above. That population follows a normal distribution with μ= 63. Find the p ...
The table shows the results of a survey in which 400 adults from the? East, 400 adults from the? South, 400 adults from the? Midwest, and 400 adults from the West were asked if traffic congestion is a serious problem. Co ...
Do you have a credit card or use some other form of consumer credit? Identify what you currently use, if any. If you do not use credit, discuss a type of credit that you might consider in the future. What advantages does ...
Determine the type of distribution for the following situation: Draw marbles from a bag which contains 5 red marbles, 6 blue marbles and 4 green marbles with replacement until you get a blue marble. a) Binomial b) Pois ...
Amount of emails. Mean=30 Find the probability that 20 emails are received on the first day and 50 emails are received on the second day.
A manufacture claims that the life span of its tires is 52,000 miles. You work for a consumer protection agency and you are testing these tires. Assume the life spans of these tires are normally distributed. You select 1 ...
You work in the quality control office for a company that manufactures fluorescent light bulbs. Your company offers a 4-year (1461 day) warranty on these bulbs. The average life span of your bulbs is 1600 days with a sta ...
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