7 - MIT OpenCourseWare http:/ocw.mit.edu 14.30 Introduction...

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MIT OpenCourseWare http://ocw.mit.edu 14.30 Introduction to Statistical Methods in Economics Spring 2009 For information about citing these materials or our Terms of Use, visit: http://ocw.mit.edu/terms .
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Problem Set #7 14.30 - Intro. to Statistical Methods in Economics Instructor: Konrad Menzel Due: Tuesday, April 14, 2009 Question One We just learned about the standard Normal distribution with PDF 4(z) and CDF @(z). Let's familiarize ourselves with it, as we will be using it a lot in the future. 1. Find u = @(z) for z = (-3, -2.5, -2, -1.5, -1, -0.5,0,0.5,1,1.5,2,2.5,3). 2. Find u = 1 - Pr(lZ1 5 z) for z = {0,0.5,1,1.5,2,2.5,3) using your answers from part (1).Explain (via math or words) how you obtained your answers. We call these values of u "p-values" which stands for "probability values" of a result at least that extreme occuring. Memorize these seven values-you will certainly use them in the future. 3. Find z = @-I (u) for u = {0.001,0.005,0.01,0.02,0.05,0.10,0.20). 4. Use the results from part (3) to obtain z = W1(l - u) for each u. 5. Use the results and/or methods from part (3) and (4) to obtain z where 1 - Pr(lZ1 < z) = u for each u in part (3). These values of z are called the "two-sided a-level critical values" where a = u in this example. For example, we say, "The (two-sided) 10% critical value of the standard normal distribution is z = . . ."
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This note was uploaded on 01/30/2010 for the course STAT 430 taught by Professor Jones during the Fall '10 term at Napa Valley College.

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7 - MIT OpenCourseWare http:/ocw.mit.edu 14.30 Introduction...

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