{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Lect15_L6_L7_handout

# Lect15_L6_L7_handout - lecture 15 Sampling Distributions I...

This preview shows pages 1–6. Sign up to view the full content.

lecture 15, Sampling Distributions I Sample Mean lecture 15, Sampling Distributions I Sample Mean The Stock Return Case ± 6 stocks: Stocks A to F ± Their returns for Year 2008 are -60%, -50%, -40%, - 30%, -20% and -10% resp. ± If we randomly select without replacement a sample of two stocks from the six, what is the distribution of the sample mean?

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
lecture 15, Sampling Distributions I Sample Mean lecture 15, Sampling Distributions I Sample Mean The Stock Return Case,( ctd) Population: 6 individual stock returns; any one is as likely to be picked as any other of the six. -0.6 -0.5 -0.4 -0.3 -0.2 -0.1 0.00 0.05 0.10 0.15 0.20 return Probability Population distribution: Uniform distribution with N = 6
lecture 15, Sampling Distributions I Sample Mean lecture 15, Sampling Distributions I Sample Mean The Stock Return Case ( ctd) Sample two stocks without replacement, what’s the mean of the sampled returns? The sampled stocks could be Stocks A and B, in which case the mean of the sampled returns is ( - 60 % - 50 %) / 2 = - 55 % They could also be Stocks A and C, in which case the mean of the sampled returns is ( - 60 % - 40 %) / 2 = - 50 % ± The mean is a random variable ; its distribution is called its sampling distribution

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
lecture 15, Sampling Distributions I Sample Mean lecture 15, Sampling Distributions I Sample Mean The Stock Return Case ( ctd) The population of the sample means Sample Sample Mean A and B -55 % A and C -50 % A and D -45 % A and E -40 % A and F -35 % B and C -45 % B and D -40 % B and E -35 % B and F -30 % C and D -35 % C and E -30 % C and F -25 % D and E -25 % D and F -20 % E and F -15 %
Sampling Distributions I Sample Mean lecture 15, Sampling Distributions I Sample Mean The Stock Return Case ( ctd) Sampling distribution of the mean of returns Samp. m. -15% -20% -25% -30% -35% -40% -45% -50% -55% Prob. 1/15 1/15 2/15 2/15 3/15 2/15 2/15 1/15 1/15 -0.6 -0.5 -0.4 -0.3 -0.2 -0.1 0.00 0.05 0.10 0.15 0.20 Sample Mean Probability The sampling distribution

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### Page1 / 19

Lect15_L6_L7_handout - lecture 15 Sampling Distributions I...

This preview shows document pages 1 - 6. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online