Econ 210 Winter 2008 Practice Questions First Midterm - Solutions_1

# Econ 210 Winter 2008 Practice Questions First Midterm - Solutions_1

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Practice Questions 1. True/False: State if the following statements are true or false. a. The sample space consists of all possible events. FALSE. Adding up all possible outcomes leads to double counting. b. If A∩B = Ø then P(A|B)=0 TRUE. If A∩B = Ø then P(A∩B = Ø)=0 and the result follows. c. If two events are exhaustive P(B)=1-P(A) FALSE. This is only true if the events are also disjoint. (Draw a Venn- Diagram to check) d. 2 (5 2 ,5 3 ) 6 10 X XY Cov X X Y σ σ + - = - FALSE. 2 (5 2 ,5 3 ) 10 6 X XY Cov X X Y σ σ + - = - e. The discrete random variable can take the following values [0,1,2,3]. The median of this random variable is 2 TRUE. This is the realization such that at least 50% are smaller. Some book make 1.5 the median. Since that is not a realization we will stick with the former definition. f. If E(X|Y)=5 then E(X)=5 TRUE. We showed this in class today. g. ( 29 1 1 1 0 with N N i i i i X X X X N = = - = = TRUE. ( 29 1 N i i X X = - = 1 1 1 1 1 1 = 0 N N N N N i i i i i i i i i X X X N X X N X N = = = = = - - = - = h.

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