Section2

# Section2 - Statistics 104 Spring 2011 Section#2 TF...

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Statistics 104 – Spring 2011 Section #2 TF Information Name: Arman Sabbaghi E-mail: [email protected] Section Times: SC 705, Wed. 12:00 – 1:00 PM and 1:00 PM – 2:00 PM Office Hours: SC 601, Th. 7:00 – 8:00 PM and F 12:00 – 1:00 PM Course Website: my.harvard.edu/k78388 Topics for Section Linear combinations of variables, portfolios E(aX + b), Var(aX + b) Var(aX + bY) = a 2 Var(X) + b 2 Var(Y) + 2abCov(X,Y) Association between two variables: scatterplots, correlation and covariance Linear regression: estimation (b 0 , b 1 ), prediction, lurking/confounding variables Practice Problems 1. One recommended portfolio has 40% of its value in T-bills and 60% of its value in stocks. At the beginning of the year, the rate of return on this portfolio for the next year is unknown (i.e. it appears to be random). To study this portfolio, let's start by defining the following variables. X = unknown one year rate of return on T-bills, Y = unknown one year rate of return on stocks Under the recommended portfolio given above, the rate of return in the portfolio is R = 0.4X + 0.6Y. In

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## This note was uploaded on 03/27/2012 for the course STATS 104 taught by Professor Michaelparzen during the Fall '11 term at Harvard.

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Section2 - Statistics 104 Spring 2011 Section#2 TF...

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