Help me ples ples i need help with number four ples

An option to buy a stock is priced at $150. If the stock closes above 30 next Thursday, the option will be worth $1000. If it closes below 20, the option will be worth nothing, and if it closes between 20 and 30, the option will be worth $200. A trader thinks there is a 50% chance that the stock will close in the 20-30 range, a 20% chance that it will close above 30, and a 30% chance that it will fall below 20.

a) Let X represent the price of the option

$1000 20/100 = 0.2

$200 50/100 = 0.5

$0 30/100 = 0.3

b) Expected option price

$= \sum x.P(X=x)\\\\ = 1000 * 0.2 + 200 * 0.5 + 0 = \$ 300$

Therefore expected gain = $300 - $150 = $150

c) The trader should buy the stock. Since there is an positive expected gain($150) in trading that stock option.

7 0

4 years ago

The school librarian, Mr. Marker, knows the library has 1,400 books but wants to reorganize how the books are displayed on the s

kipiarov [429]

Answer:

200 resource books

800 fiction books

400 nonfiction books

Step-by-step explanation:

Let's define x as the amount of resource books that are in the library. As he has four times as many fiction books as resource books, that means he has 4*x fiction books.

We also know he has half as many nonfiction books as fiction books, that is 1/2*4*x = 2*x nonfiction books.

We just need to find out the value of x.

We know there are 1,400 books in total and there are just 3 types of books. Therefore, if we sum all of them, we get the 1,400.

Written in math language, that is

x + 4x + 2x = 1,400

7x = 1,400

We divide by 7 on both sides and we get

7/7x = 1,400/7

x = 200

Now we replace the x with 200 to know how many books he has of each type:

Resource books = x = 200

Fiction books = 4*x = 4*200 = 800