Economics 120A
Name:
________answer________________
Professor Yongil Jeon
Summer 2007
Student ID#: _________________________
Answer to Homework #1 – Summer 2007
(Midterm Exam, Summer 2006)
Answer all questions on separate paper. This problem set should be handed in to TA Deniz
Kebabci at the beginning of your review session on Thursday, July 19, 2007.
Problem sets may
not be handed in once solutions have been distributed.
Please write down your name and PID
clearly. Good luck!
1 (3 points). Which measure of dispersion in a data set is the most intuitive and represents an
average as a spread?
A)
Range.
B)
Mode.
C)
Standard deviation.
D)
Variance.
E)
Mean.
Answer: C
2 (3 points).
Which of the following is not
a measure of central tendency in a population?
A)
Mean.
B)
Mode.
C)
Median.
D)
Range.
Answer: D
3 (4 points).
In finance, an investor who ignores risk is termed "risk neutral."
What descriptive
statistic is our risk neutral investor ignoring when she generates stock portfolios?
A)
Median.
B)
Mean.
C)
Mode.
D)
Standard deviation.
E)
None of the above.
Answer: D
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Answer to HW #1, ECON 120A, SUMMER 2007
4. (10 points)
. Prove that the sum of deviations about the sample mean is zero.
Answer: The question asks you to show that for sample size n, that the sum of deviations about
the sample mean is zero:
Using the definition of the sample mean, this can easily be shown:
5. (10 points)
A firm is interested in testing the advertising effectiveness of a new
television commercial. As part of the test, the commercial is shown on a 6:30pm local
news program in San Diego. Two days later, a market research firm conducts a telephone
survey to obtain information on recall rates (percentage of viewers who recall seeing the
commercial) and impressions of the commercial.
A.
(3 points) What is the population of this study?
B.
(3 points) What is the sample of this study?
C.
(3 points) Why would a sample be used in this situation? Explain.
Answer.
A.
All adult viewers reached by the station
B.
Views contacted in the telephone survey
C.
A sample is an observed subset of populations, making conclusions about the
wider population. This sample is a representative of the population, while
population sizes are so large so expensive to collect.
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 Summer '08
 Jeyeon
 Economics, Standard Deviation, ECON 120A

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