D.W. Simpson Worldwide Actuarial Recruitment Life Health Pension Casualty US Asia Australia Europe Salary Apply Ezra Penland Actuarial Recruiters Top Actuary Jobs Salary Surveys Apply Bios Casualty Health Life Pension Pauline Reimer, ASA, MAAA Pryor AssociatesActuarial Openings: Life, P&C, Health, Pensions, Finance Advertise Here Contact us at actuary@actuary.com or 770-425-8576Reach top actuarial professionals

# Thread: Question For Dr. Weishaus

1. ## Question For Dr. Weishaus

Or anyone else that can answer it...could you please explain the difference in the chi-squared statistic calculated from the following two pieces of information

assume pass rates are the same across companies

(Number of Students, Number Passed)
Company A 20 , 5
Company B 15 , 9
Company C 17 , 10

and this

(Number Failed , Number Passed)
Company A 15 , 5
Company B 6 , 9
Company C 7 , 10

2. There should be no difference if you do them correctly.

3. Dr. Weishaus I'm facing a little of confusion in chapter 7 (6th edition). I'm confusing between :
"The expected payoff of an option" AND "the expected payoff of an option, given that it pays off" OR "the conditional expected payoff".
In the exercises of chapter 7, you were calculating the expected payoff of an option as the partial expectation which is
E[max(0, S-K)]= S(0)e^(drift).N(d1)-K.N(d2), but in the practice exams there are many problems where you calculated the expected payoff as the conditional expectation. In praxtice exam 10, page 541, #16, we're asked to calculate the expected payoff of the call option, the answer is calculated as the conditional expected payoff, and also I didn't understand why you just put X(0).N(d1)/N(d2)- K , why we don't multiply X(0) by the lognormal random variable power the drift ?

There are currently 1 users browsing this thread. (0 members and 1 guests)

#### Posting Permissions

• You may not post new threads
• You may not post replies
• You may not post attachments
• You may not edit your posts
•