Quiz3 - trading day is assumed to be an equally likely random event What is the probability that a stock will show an increase in its closing price

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GB 303 –Fall 2011 Name: Quiz 3 (Chapter 5 covered) 1) The strength of the relationship between two numerical variables is measured by the: A) Expected Value. B) Variance. C) Covariance. D) Standard Deviation. 2) Given the following probability distribution for variables X and Y: P(X i Y i ) X Y .5 5 7 .2 -2 12 .3 10 0 Compute E(X+Y). A) 8 B) 9 C) 10 D) 11 Use the following information for questions 3, 4, and 5. P(X i Y i ) X Y .4 100 200 .6 200 100 3) Which of the following is true? A) E(X) > E(Y) B) E(X) < E(Y) C) E(X) = E(Y) D) Cannot be determined from the given information 4) Which of the following is true? A) σ 2 X > σ 2 Y B) σ 2 X < σ 2 Y C) σ 2 X = σ 2 Y D) Cannot be determined from the given information 5) What is σ XY ? A) 2400 B) -2400 C) 480 D) -480 6) True or False? Regardless of whether two variables are independent or dependent, the variance of their sum is equal to the sum of their variances, i.e. Var(X+Y) = σ 2 X + σ 2 Y .
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GB 303 –Fall 2011 Name: 7) The increase or decrease in the price of a stock between the beginning and end of a
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Unformatted text preview: trading day is assumed to be an equally likely random event. What is the probability that a stock will show an increase in its closing price on five consecutive days? A) .50 B) .125 C) .0625 D) .03125 8) 19 people were surveyed and asked if they would return to eat at Doug’s Famous Cookies. Given that 80% of all people living in Madison would return to Doug’s Famous Cookies, what is the probability that exactly 15 people in the study answered “yes”? A) .0352 B) .1666 C) .2182 D) .8 9) True or False? The number of ways to choose X objects out of n objects, nC X = X!/n!. 10) True or False? The mean of a binomial distribution is equal to the sample size multiplied by the probability of an event of interest. Answers: 1) C GB 303 –Fall 2011 Name: 2) D 3) A 4) C 5) B 6) False 7) D 8) C 9) False 10) True...
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This note was uploaded on 02/07/2012 for the course GEN BUS 303 taught by Professor Mullins during the Spring '08 term at Wisconsin.

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Quiz3 - trading day is assumed to be an equally likely random event What is the probability that a stock will show an increase in its closing price

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