Which type of option helps the importer to hedge risks of exchange rate? A. Put option B. All names are not correct c. Call opti
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Answer:
General Formulas and Concepts:
<u>Calculus</u>
Differentiation
- Derivatives
- Derivative Notation
Basic Power Rule:
- f(x) = cxⁿ
- f’(x) = c·nxⁿ⁻¹
Derivative Rule [Chain Rule]:
Step-by-step explanation:
<u>Step 1: Define</u>
<em>Identify</em>
<u>Step 2: Differentiate</u>
- Logarithmic Differentiation [Derivative Rule - Chain Rule]:
- Trigonometric Differentiation [Derivative Rule - Chain Rule]:
- Basic Power Rule:
- Rewrite [Trigonometric Identities]:
Topic: AP Calculus AB/BC (Calculus I/I + II)
Unit: Differentiation
Answer:
(a) P (Y = 3) = 0.0844, P (Y ≤ 3) = 0.8780
(b) The probability that the length of a drought exceeds its mean value by at least one standard deviation is 0.2064.
Step-by-step explanation:
The random variable <em>Y</em> is defined as the number of consecutive time intervals in which the water supply remains below a critical value <em>y₀</em>.
The random variable <em>Y</em> follows a Geometric distribution with parameter <em>p</em> = 0.409<em>.</em>
The probability mass function of a Geometric distribution is:
(a)
Compute the probability that a drought lasts exactly 3 intervals as follows:
Thus, the probability that a drought lasts exactly 3 intervals is 0.0844.
Compute the probability that a drought lasts at most 3 intervals as follows:
P (Y ≤ 3) = P (Y = 0) + P (Y = 1) + P (Y = 2) + P (Y = 3)
Thus, the probability that a drought lasts at most 3 intervals is 0.8780.
(b)
Compute the mean of the random variable <em>Y</em> as follows:
Compute the standard deviation of the random variable <em>Y</em> as follows:
The probability that the length of a drought exceeds its mean value by at least one standard deviation is:
P (Y ≥ μ + σ) = P (Y ≥ 1.445 + 1.88)
= P (Y ≥ 3.325)
= P (Y ≥ 3)
= 1 - P (Y < 3)
= 1 - P (X = 0) - P (X = 1) - P (X = 2)
Thus, the probability that the length of a drought exceeds its mean value by at least one standard deviation is 0.2064.