EC 41 UCLA Fall 2008
Formulas that will be given on The final:
No “Cheat Sheet” or any other written material is allowed.
Bring your photo id and a calculator you know now to use.
I will not try to answer questions about how to use your calculator.
Table A and Table D – or as much of these tables as you need to answer the questions.
2
)
(
1
1
x
x
n
s
i
x
−
−
=
( )( )
()
[]
∑∑
∑
∑
∑
−
⋅
−
−
=
2
2
2
2
Y
Y
n
X
X
n
Y
X
XY
n
r
⎥
⎥
⎦
⎤
⎢
⎢
⎣
⎡
⎟
⎟
⎠
⎞
⎜
⎜
⎝
⎛
−
⎟
⎟
⎠
⎞
⎜
⎜
⎝
⎛
−
−
=
∑
=
n
i
y
i
x
i
s
y
y
s
x
x
n
1
1
1
( )( )
∑
−
−
=
2
2
1
)
(
X
X
n
Y
X
XY
n
b
=
⎟
⎟
⎠
⎞
⎜
⎜
⎝
⎛
x
y
S
S
r
X
b
Y
b
o
−
=
The following formulas below may be of use.
2
2
2
X
bX
a
b
σσ
=
+
Y
X
Y
X
Y
X
σρ
2
2
2
2
+
+
=
+
Y
X
Y
X
Y
X
2
2
2
2
−
+
=
−
For “weighted average”
where a+b = 1
Y
X
Y
X
bY
aX
b
a
b
a
ρσ
σ
2
2
2
2
2
2
+
+
=
+
If X
1
& X
2
are uncorrelated (so
ρ
= 0), then variance of a portfolio of n investments denoted X
1
, X
2
, X
3
, …X
n
; each
with a 1/n share, is:
2
2
2
2
2
2
2
)
/
1
(
2
)
/
1
(
2
)
/
1
(
)
/
1
(
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 Spring '09
 Brown
 Normal Distribution, Variance, Probability theory, Statistical hypothesis testing, Sy ⎜S

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