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Risk Neutral Pricing and Financial Mathematics: A Primer by John L. Teall, Peter M. Knopf

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Appendix B

Exercise Solutions

Chapter 1

1.1. The sum is as follows:

[24964250211]+[306213704]=[541585287215]ABC

image

1.3. 

a. [18964253235][16384292535]AATimage

b. The transpose of a column vector is a row vector:

[9637][9637]yyT

image

Similarly, the transpose of a row vector is a column vector.

c. Note that the transpose VT of a symmetric matrix V is V:

V=[0.090.010.040.010.160.100.040.100.64]VT=[0.090.010.040.010.160.100.040.100.64]=V

1.5. 

a. 2A=[2(2)2(0)2(3)

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